Finance Act 2009

Part 4 Effect of interest on reliefs

15 (1) Where conditions A and B are met—

(a) the appropriate adjustment is to be made of the amount of late payment interest payable, and

(b) accordingly, the appropriate repayment (if any) is to be made of any late payment interest previously paid.

(2) Condition A is that any amount of late payment interest is payable on—

(a) any amount on account of income tax which is due and payable in accordance with section 59A(2) of TMA 1970, or

(b) any amount of income tax or capital gains tax which becomes due and payable in accordance with section 55 or 59B of TMA 1970.

(3) Condition B is that relief from the tax is given by a discharge of any of that amount of tax.

Paragraph 16 makes provision about the circumstances in which P is entitled to have a relief treated as being given by discharge.

(4) In this paragraph—

• “the appropriate adjustment” is such adjustment as is necessary to secure that the total amount of late payment interest, if any, paid or payable on the amount of tax in question is the same as it would have been if the tax discharged had never been charged;

• “the appropriate repayment” is such repayment as is necessary to give effect to the appropriate adjustment.

16 (1) Where—

(a) income tax or capital gains tax has been paid for a chargeable period (“period A”), and

(b) relief from any amount of that tax is given to a person (“P”) by repayment,

P is entitled to require that the amount repaid be treated for the purposes of paragraph 15(3), so far as it will go, as if it were a discharge of a qualifying charge to tax.

(2) A qualifying charge to tax is any amount of tax charged on P (whether alone or together with other persons) by or by virtue of any assessment for or relating to period A.

(3) But sub-paragraph (1) does not permit an amount to be applied—

(a) to any assessment made after the relief was given, or

(b) to more than one assessment so as to reduce, without extinguishing, the amount of tax charged.