The Finance Act 2009, Sections 101 to 103 (Income Tax Self Assessment) (Appointed Days and Transitional and Consequential Provisions) Order 2011

EXPLANATORY NOTE

(This note is not part of the Order)

This Order comes into force on 1st April 2011. Article 3 of this Order appoints 31st October 2011 as the day on which the interest regime contained in sections 101 to 103 of the Finance Act 2009 (c. 10) comes into force for the purposes of self-assessment amounts that are payable by a person to Her Majesty’s Revenue and Customs (“HMRC”) or payable or repayable by HMRC to any person.

Article 4 provides for transitional arrangements which ensure that self-assessment amounts accruing interest or repayment supplement under the existing interest regimes will continue to accrue interest under sections 101 to 103 of the Finance Act 2009 from 31st October 2011 onwards.

Article 5 clarifies that the existing interest provisions do not have effect for self-assessment amounts payable or repayable from 31st October 2011 onwards.

Article 7 makes a consequential amendment to section 69(1) of the Taxes Management Act 1970 (c. 9) applying that section to interest charged under section 101 of the Finance Act 2009 on self-assessment amounts.

Article 8 makes consequential amendments to section 107A of the Taxes Management Act 1970, replacing references to section 103A of that Act with references to section 101 of the Finance Act 2009 and ensuring that interest under that section is recoverable from the relevant trustees of a settlement.

Article 9 makes a consequential amendment to paragraph 6 of Schedule 2 to the Social Security Contributions and Benefits Act 1992 (c. 4) which replaces references to section 86 of the Taxes Management Act 1970 and section 824 of the Income and Corporation Taxes Act 1988 (c. 1) with references to sections 101 and 102 of the Finance Act 2009, respectively.

Article 10 omits regulation 3(1)(ab) of the Taxes (Interest Rate) Regulations 1989 (S.I. 1989/ 1297), which sets the rate applicable under section 178 for the purposes of section 103A of the Taxes Management Act 1970, so far as it relates to any person who may be required by a notice under section 8, 8A or 12AA of that Act (or under any of those sections as extended by section 12 of that Act) to make and deliver a return for a year of assessment or other period, and income tax or capital gains tax. The reference to section 103A in article 3(1)(ab) is omitted as section 178 will no longer be applicable to that section.

Article 11 makes a consequential amendment to regulation 4(1) of the Recovery of Social Security Contributions Due in Other Member States Regulations 2010 (S.I. 2010/926) which replaces a reference to section 178 of the Finance Act 1989 (c. 26) with a reference to sections 101 and 103 of the Finance Act 2009 for the purposes of Class 4 national insurance contributions.

A full Impact Assessment of the effect that the interest harmonisation and late filing and late payment penalties reform will have on the costs of business and the voluntary sector was published by HMRC on 14th April 2009 and is available at http://www.hmrc.gov.uk/better-regulation/ia.htm.