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Finance Act 2014

Forms of accelerated payment

61.Section 223 explains the consequences of an accelerated payment notice given while a tax enquiry is in progress.

62.Subsection (3) explains that the accelerated payment is to be treated as a payment on account of the tax in dispute. When the final liability is agreed, this payment will be set against it, and any interest payable on that final liability will be adjusted so that no interest will be charged on the amount of the accelerated payment from the date that it is paid.  If the final liability is lower than the accelerated payment any excess will be repaid with interest.

63.Subsections (4) and (5) set out the time limits for making an accelerated payment.

64.Subsection (6) deals with the special case where Inheritance Tax is payable by instalments.  The due date for an accelerated payment that relates to those instalments cannot be earlier than the due date for paying the instalment to which it relates.

65.Subsection (7) deals with the situation where the taxpayer pays some or all of the tax in dispute before an accelerated payment is made.  The amount paid will reduce the amount of the accelerated payment that is outstanding.

66.Section 224 sets out how an accelerated payment notice operates for cases under appeal.  It operates by amending section 55 of TMA 1970, which applies to income tax, PAYE, corporation tax and capital gains tax; and the equivalent rules for IHT, SDLT and ATED.  Any tax that is the subject of an accelerated payment notice cannot be postponed under section 55 of TMA 1970 (and the equivalents), and if the tax has already been postponed the accelerated payment notice has the effect that it is no longer postponed.  The time limits for making the payment are the same as in section 223.

67.Section 225 amends the rule in section 56 of TMA 1970 (and its parallels for SDLT and ATED) which directs that the tax in dispute should be paid to the successful litigant pending any further appeal.  The amendment permits HMRC to apply to the tribunal or court for an order not to repay the tax where HMRC pursues a further appeal and HMRC considers there would be risk to the Exchequer in making the repayment at that stage.

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