The Taxes (Interest Rate) (Amendment No. 2) Regulations 1997

Statutory Instruments

1997 No. 2707

INCOME TAX

INHERITANCE TAX

TAXES

The Taxes (Interest Rate) (Amendment No. 2) Regulations 1997

Made

17th November 1997

Laid before the House of Commons

18th November 1997

Coming into force

9th December 1997

The Treasury, in exercise of the powers conferred on them by section 178 of the Finance Act 1989(1), hereby make the following Regulations:

1.  These Regulations may be cited as the Taxes (Interest Rate) (Amendment No. 2) Regulations 1997 and shall come into force on 9th December 1997.

2.  In regulation 3(1) of the Taxes (Interest Rate) Regulations 1989(2), in sub-paragraph (b), for the words “paragraph 6B of Schedule 3 to” there shall be substituted the words “section 118F of, and paragraph 6B of Schedule 3 to,”.

Bob Ainsworth

Jon Owen Jones

Two of the Lords Commissioners of Her Majesty’s Treasury

17th November 1997

Explanatory Note

(This note is not part of the Regulations)

These Regulations, made under powers contained in section 178 of the Finance Act 1989 (“section 178”), make provision for the rate of interest applicable for the purposes of section 118F of the Income and Corporation Taxes Act 1988 (“section 118F” and “the Taxes Act” respectively). Sections 118A to 118K of the Taxes Act were inserted by paragraph 1 of Schedule 29 to the Finance Act 1996.

Subsection (1) of section 178 provides that the rate of interest applicable for the purposes of the enactments to which that section applies is to be the rate provided for by regulations made by the Treasury under that section. The Regulations so made are the Taxes (Interest Rate) Regulations 1989 (S.I. 1989/1297, amended by S.I. 1996/3187) (“the Interest Rate Regulations”). Regulation 3 of the Interest Rate Regulations (as amended) specifies the interest rate applicable under section 178 of the 1989 Act in relation to various enactments. It also makes provision for changes in the applicable interest rate and for the formula to be used in calculating the new rate.

These Regulations provide for section 118F to be added to the enactments to which regulation 3 of the Interest Rate Regulations applies.

Subsection (1) of section 118F makes provision as regards the day on which income tax in respect of United Kingdom public revenue dividends for which the Bank of England, the Bank of Ireland, the National Debt Commissioners or any public office or department of the Crown are liable to account pursuant to section 118E(1) or (2) of the Taxes Act becomes due and payable. Subsection (2) of section 118F makes provision as regards the day on which any other income tax for which a paying agent is liable to account under section 118E(1) of the Taxes Act, and any income tax for which a collecting agent is liable to account under section 118E(3) of the Taxes Act, becomes due and payable. Subsection (3) of section 118F provides that any tax due under subsection (1) or (2) of that section shall carry interest, at the rate applicable under section 178, from the date on which it becomes due until it is paid.

(1)

1989 c. 26; section 178 was amended by paragraph 107 of Schedule 2 to the Social Security (Consequential Provisions) Act 1992 (c. 6), paragraph 19(4) of Schedule 10 to the Taxation of Chargeable Gains Act 1992 (c. 12), paragraph 5 of Schedule 11 to the Finance (No. 2) Act 1992 (c. 48), paragraph 44 of Schedule 19 to the Finance Act 1994 (c. 9), and by paragraph 30 of Schedule 7, paragraph 13 of Schedule 18, paragraph 8 of Schedule 29 and Part V(2) and (8) of Schedule 41, to the Finance Act 1996 (c. 8).

(2)

S.I. 1989/1297; a relevant amending instrument is S.I. 1996/3187.