Corporation Tax Act 2010 section 357YK

Corporation tax rate on restitution interest

Section 357YK establishes the specific rate of corporation tax that applies to restitution interest received by a company.

• Restitution interest is subject to corporation tax at a special rate, separate from the main corporation tax rate.
• This special rate is called the "restitution payments rate" and is set at 45%.
• The 45% rate applies regardless of the main rate of corporation tax that would otherwise apply to the company's profits.
• This higher rate reflects the nature of restitution interest, which arises where HMRC is required to repay tax that was unlawfully collected.