Applicable rate of interest on overdue corporation tax3A

1

For the purposes of section 87A of the Taxes Management Act 19703, the rate applicable under section 178 shall, subject to paragraph (2), be 6.25 per cent. per annum.

2

Where, on a reference date after 1st October 1993, the reference rate found on that date differs from the established rate, the rate applicable under section 178 for the purposes of the enactment referred to in paragraph (1) shall, on and after the next operative date, be the percentage per annum found by applying the formula specified in paragraph (3) and, if the result is not a multiple of one–quarter, rounding the result down to the nearest amount which is such a multiple.

3

The formula specified in this paragraph is–

$\left(\mathrm{RR}+2.5\right)$

where

• RR is the reference rate referred to in paragraph (2) and SCR is the percentage at which corporation tax at the small companies' rate is charged for the financial year in which the reference date referred to in that paragraph falls.

Applicable rate of interest on tax overpaid3B

1

For the purposes of section 826 of the Income and Corporation Taxes Act 19884, the rate applicable under section 178 shall, subject to paragraph (2), be 3.25 per cent. per annum.

2

Where, on a reference date after 1st October 1993, the reference rate found on that date differs from the established rate, the rate applicable under section 178 for the purposes of the enactment referred to in paragraph (1) shall, on and after the next operative date, be the percentage per annum found by applying the formula specified in paragraph (3) and, if the result is not a multiple of one–quarter, rounding the result down to the nearest amount which is such a multiple.

3

The formula specified in this paragraph is–

$\left(\mathrm{RR}-1\right)\genfrac{}{}{0.1ex}{}{\left(100-\mathrm{CTR}\right)\text{,}}{100}$

where

• RR is the reference rate referred to in paragraph (2) and CTR is the percentage at which corporation tax is charged for the financial year in which the reference date referred to in that paragraph falls.