Revenue news

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Revenue news

Interest rates

The Inland Revenue has announced new rates of interest for underpaid and overpaid instalment payments of corporation tax, and early payments of corporation tax not due by instalments, in respect of accounting periods ending on or after 1 July 1999. These rates take effect from Monday 16 August 2004.

The rate of interest charged on underpaid instalment payments of corporation tax has changed from 5.50 per cent to 5.75 per cent.

The rate of interest on overpaid instalment payments of corporation tax, and on corporation tax paid early (but not due by instalments), has changed from 4.25 per cent to 4.50 per cent.

In addition, the Revenue has announced the following interest rate changes, which will take effect from 6 September 2004, whether or not interest has already started to run before that date.

The rate of interest charged on income tax, National Insurance contributions, capital gains tax, stamp duty, stamp duty land tax and stamp duty reserve tax paid late and on tax charged by an assessment for the purpose of making good to the Crown a loss of tax wholly or partly attributable to failure or error by the taxpayer has changed from 6.5 per cent to 7.5 per cent.

The rate of interest on overpaid income tax, National Insurance contributions, capital gains tax, stamp duty and stamp duty reserve tax (repayment supplement) has changed from 2.5 per cent to 3.5 per cent.

The rate of interest for development land tax, petroleum revenue tax (including supplementary petroleum duty and advanced petroleum revenue tax), and on advance corporation tax and income tax on company payments which became due on or before 13 October 1999 paid late or overpaid has changed from 5 per cent to 5.75 per cent.

The rate of interest on late payment of income tax on company payments which became due on or after 14 October 1999 has changed from 6.5 per cent to 7.5 per cent.

The rate of interest for late payments or repayments of inheritance tax, capital transfer tax and estate duty has changed from 3 per cent to 4 per cent.

The rate of interest charged on unpaid corporation tax for accounting periods ending on or after 1 October 1993 (under pay and file) has changed from 5 per cent to 6 per cent. The rate of interest paid on overpaid corporation tax under pay and file has changed from 2 per cent to 2.75 per cent.

The rate of interest for either late payments or repayment of corporation tax for accounting periods ended on or before 30 September 1993 (pre pay and file), has changed from 5 per cent to 6 per cent.

The rate of interest on unpaid corporation tax for accounting periods ending on or after 1 July 1999 (other than underpaid corporation tax instalments) has changed from 6.5 per cent to 7.5 per cent.

The rate of interest on overpaid corporation tax for accounting periods ending after 1 July 1999, in respect of periods after the normal due date, has changed from 3 per cent to 4 per cent.

(Inland Revenue news release dated 11 August 2004.)

Pensions tax

The Revenue has launched a formal consultation on draft regulations relating to the simplification of the pensions taxation. The draft regulations were previously published on the Revenue's Finance Bill 2004 Internet pages, but have been updated in accordance with the final form of the Finance Act 2004 (which contains the primary legislation).

The regulations contain the detail of how the simplified régime will operate and comments on them should be received by 5 November 2004.

Comments should be sent to: Pensions Simplification Team, New Wing, Somerset House, Strand, WC2R 1LB, e-mail: pensionsconsult@ ir.gsi.gov.uk.

(www.inlandrevenue.gov.uk)

Child trust fund

Following the laying of the main child trust fund regulations on 27 May 2004, the Treasury has published draft amending regulations to allow early access to child trust fund accounts for children who are terminally ill and to improve the arrangements for issuing annual statements and transfers of accounts. The final version of the regulations, subject to Parliamentary approval, will be laid in October.

The regulations on the role of the official solicitor will also be laid in October. Regulations setting out the arrangements for appeals are expected to be published later in the year. Regulations for the taxation of insurance companies on their child trust fund business will be produced shortly for informal consultation.

The Government is also currently considering a change to the stakeholder child trust fund regulations following representations from participants in the roadshows and consultations with providers. A change to the qualifying investments to the stakeholder child trust fund account has been proposed, removing the right to invest directly in listed company shares and securities.

Further information can be found on the Revenue website: www.inlandrevenue.gov.uk/ctf/index.htm. Comments on the draft amending regulations should be sent by 30 September 2004 to Steve Claughan, Room 135, New Wing, Somerset House, Strand, London WC2R 1LB, e-mail: Steve.Claughan@ ir.gsi.gov.uk.

(Inland Revenue news release dated 6 August 2004.)

Foreign income dividends

A group litigation order, referred to as the 'foreign income dividends group litigation' was made in the High Court on 21 July 2004. This litigation concerns claims which seek to challenge the United Kingdom foreign income dividends provisions and to assert that these provisions were or are in breach of the European Community Treaty and/or the European Convention on Human Rights.

(www.inlandrevenue.gov.uk)

Savings interest

The Revenue has published an updated version of leaflet IR111, 'Bank and building society interest — Are you paying tax when you don't need to?' which explains how to receive interest without tax deducted, how to claim tax back and what forms to use.

The Revenue has also published a new version of form R85, 'Savings: application by savers who usually live in the United Kingdom to receive interest without tax taken off'.

The leaflet and form are on the Revenue website.

(www.inlandrevenue.gov.uk)

Issue: 3971 / Categories: