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Income Tax (Trading and Other Income) Act 2005

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54Penalties [F1, interest and VAT surcharges] [F1and interest] U.K.
This section has no associated Explanatory Notes

(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 interestDescription of tax, levy or duty
Interest under any provision of Part 9 of TMA 1970Income tax, capital gains tax and corporation tax
[F2Interest 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 1994Value added tax
[F3Interest under section 101 of FA 2009 in respect of an amount of value added tax] 
Penalty under any of sections 8 to 11 of FA 1994Excise duties
Penalty under any of paragraphs 12 to 19 of Schedule 7 to FA 1994Insurance premium tax
[F4Interest 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 1996Landfill tax
[F5Interest 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 2000Climate change levy
Interest under any of paragraphs 70, 81 to 85 [F6, 109 and 123(6)] of that Schedule 
Penalty under any provision of Part 2 of FA 2001Aggregates levy
Interest under [F7section 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 [F8to, FA 2001] 
Penalty under section 25 or 26 of FA 2003 [F9Customs duties]
Penalty under any provision of Part 4 of FA 2003Stamp duty land tax
Interest under any provision of that Part 
[F10Penalty under Schedule 24 to FA 2007Various taxes and excise duties]
[F11Penalty under Schedule 41 to FA 2008 Various taxes and excise duties]
[F12Penalty under Schedule 16 to F(No. 2)A 2017 Various taxes]

(3)[F13In 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 heading substituted (1.1.2023 for specified purposes, 6.4.2024 for specified purposes) by Finance Act 2021 (c. 26), s. 118(2), Sch. 27 para. 31(a); S.I. 2022/1278, reg. 2(3)(4)(b); S.I. 2024/440, reg. 2

F9Words in s. 54(2) substituted (13.9.2018 for specified purposes, 31.12.2020 in so far as not already in force) by Taxation (Cross-border Trade) Act 2018 (c. 22), s. 57(1)(a), Sch. 7 para. 154 (with savings and transitional provisions in S.I. 2020/1449, reg. 3 and 2020 c. 26, Sch. 2 para. 7(7)-(9)); S.I. 2020/1642, reg. 4(a)

F12Words 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

F13S. 54(3) omitted (1.1.2023 for specified purposes, 6.4.2024 for specified purposes) by virtue of Finance Act 2021 (c. 26), s. 118(2), Sch. 27 para. 31(b); S.I. 2022/1278, reg. 2(3)(4)(b); S.I. 2024/440, reg. 2

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