Part 2 U.K.Trading income

Chapter 4 U.K.Trade profits: rules restricting deductions

Penalties, interest and VAT surcharges U.K.

54 Penalties, interest and VAT surcharges U.K.

(1) In calculating the profits of a trade, no deduction is allowed for any penalty or interest mentioned in the first column of the following table.

(2) This is the table—

Penalty or interest	Description of tax, levy or duty
Interest under any provision of Part 9 of TMA 1970	Income tax, capital gains tax and corporation tax
[F1 Interest under section 101 of FA 2009 in connection with sums required to be deducted under section 61 of FA 2004 (construction industry)]
Penalty under any of sections 60 to 70 of VATA 1994	Value added tax
Interest under section 74 [F2 or 85A] of VATA 1994
Penalty under any of sections 8 to 11 of FA 1994	Excise duties
Penalty under any of paragraphs 12 to 19 of Schedule 7 to FA 1994	Insurance premium tax
[F3 Interest under section 60(8) of FA 1994 or paragraph 21 of Schedule 7 to FA 1994]
Penalty under any provision of Part 5 of Schedule 5 to FA 1996	Landfill tax
[F4 Interest under section 56(5) of, or paragraph 26 or 27 of Schedule 5 to, FA 1996]
Penalty under any provision of Schedule 6 to FA 2000	Climate change levy
Interest under any of paragraphs 70, 81 to 85[F5 , 109 and 123(6)] of that Schedule
Penalty under any provision of Part 2 of FA 2001	Aggregates levy
Interest under [F6 section 42(6) of, or] any of paragraphs 5 to 9 of Schedule 5 to, paragraph 6 of Schedule 8 to and paragraph 5 of Schedule 10 [F7 to, FA 2001]
Penalty under section 25 or 26 of FA 2003	Customs, export and import duties
Penalty under any provision of Part 4 of FA 2003	Stamp duty land tax
Interest under any provision of that Part
[F8 Penalty under Schedule 24 to FA 2007	Various taxes and excise duties]
[F9 Penalty under Schedule 41 to FA 2008	Various taxes and excise duties]
[F10 Penalty under Schedule 16 to F(No. 2)A 2017	Various taxes]

(3) In calculating the profits of a trade, no deduction is allowed for any surcharge under section 59 of VATA 1994.

Textual Amendments

F1Words in s. 54(2) table substituted (with effect in accordance with art. 1(2) of the amending S.I.) by The Finance Act 2009, Sections 101 and 102 (Interest on Late Payments and Repayments) (Consequential Amendments) Order 2014 (S.I. 2014/1283), art. 1(1), Sch. para. 5

F2 Words in s. 54(2) table inserted (1.4.2009) by The Transfer of Tribunal Functions and Revenue and Customs Appeals Order 2009 (S.I. 2009/56), art. 1(2), Sch. 1 para. 438(2)

F3 Words in s. 54(2) table substituted (1.4.2009) by The Transfer of Tribunal Functions and Revenue and Customs Appeals Order 2009 (S.I. 2009/56), art. 1(2), Sch. 1 para. 438(3)

F4 Words in s. 54(2) table substituted (1.4.2009) by The Transfer of Tribunal Functions and Revenue and Customs Appeals Order 2009 (S.I. 2009/56), art. 1(2), Sch. 1 para. 438(4)

F5 Words in s. 54(2) table substituted (1.4.2009) by The Transfer of Tribunal Functions and Revenue and Customs Appeals Order 2009 (S.I. 2009/56), art. 1(2), Sch. 1 para. 438(5)

F6 Words in s. 54(2) table inserted (1.4.2009) by The Transfer of Tribunal Functions and Revenue and Customs Appeals Order 2009 (S.I. 2009/56), art. 1(2), Sch. 1 para. 438(6)(a)

F7 Words in s. 54(2) table substituted (1.4.2009) by The Transfer of Tribunal Functions and Revenue and Customs Appeals Order 2009 (S.I. 2009/56), art. 1(2), Sch. 1 para. 438(6)(b)

F8 Words in s. 54(2) table added (1.4.2009) by The Finance Act 2008, Schedule 40 (Appointed Day, Transitional Provisions and Consequential Amendments) Order 2009 (S.I. 2009/571), art. 1(1), Sch. 1 para. 28

F9 Words in s. 54(2) table added (1.4.2010) by The Finance Act 2008 (Penalties for Errors and Failure to Notify etc) (Consequential Amendments) Order 2010 (S.I. 2010/530), art. 1, Sch. para. 8

F10 Words in s. 54(2) table inserted (16.11.2017) (with effect in accordance with Sch. 16 para. 62 of the amending Act) by Finance (No. 2) Act 2017 (c. 32), Sch. 16 para. 59