Repayments / reallocations: repayment interest: introduction
If tax has been paid for an AP ending after the 30 September 1993 and there is an overpayment of
- Corporation tax
- Income tax
- Payments of tax credits
- CIS25 deductions (only for a period before 05 April 2002), see Company Taxation Manual CTM92170
- S458 CTA 2010 (formerly S419 (4) ICTA 1988) relief (only for APs ending on or after 01 October 1993) see CTM98245 / CTM98265
Which is to be repaid or reallocated, the overpayment potentially attracts repayment interest under S826 ICTA 1988. Repayment interest may be paid on repayments or reallocations
- Regardless of the place of residence of the recipient company
- On condition that the repayment relates to a period for which the company is within the charge to Corporation Tax
For APs ending after the 01/07/99 repayment interest is chargeable as ‘interest’ under the loan relationship rules S479 CTA 2009).
Note: Repayment interest does not apply to
- Overpayments of late payment interest (LPI) or penalties
- Repayments made by the CT Unit in Cumbernauld of payments made in error or incorrectly allocated
- Repayments of any tax overpaid following assessments under s956 or s957 ITA 2007 (deductions of income tax), or repayments of withheld income tax following a CT61 set-off (s953(3b) ITA 2007).