1081 Effect on interest of reliefs given by discharge or repayment

Summary

This section provides for adjustment of interest where tax is discharged or repaid.

Details

(1)(a) Where an income tax, corporation tax or capital gains tax assessment is partly discharged consequent on the allowance of some relief, any interest already paid is likewise to be adjusted (and repaid if necessary) so as to correspond with the interest which should have been paid had the discharged tax not been charged.

(1)(b) Where income tax, corporation tax or capital gains tax is paid and relief from that income tax, corporation tax or capital gains is given by way of repayment then the consequences are to be broadly analogous to those which apply under subsection (1)(a,) in cases where relief is given by way of discharge. Where, however, some tax has been paid promptly and some late and interest is payable for the late tax, then the taxpayer may require that any repayment due because of the allowance of a relief should instead be treated as a reduction of the tax on which interest is to be paid. The effect of this is that the tax due to be repaid is treated as the discharge of other tax on which interest is payable thereby allowing for the reduction of the interest payable in accordance with paragraph (a).

(2) Relief from one tax (whether given by discharge or repayment) cannot be related back for interest purposes against another tax.

Relevant Date: Finance Act 2021