Corporation Tax Act 2010 section 716

Interest

Section 716 deals with the charging of interest on overdue corporation tax that has been assessed on a company following a change of ownership, where the tax is recovered from a related party under the unpaid tax recovery provisions.

• Interest applies to corporation tax assessed under the recovery provisions of sections 710 and 713, which allow HMRC to recover unpaid tax from connected parties after a change in company ownership.
• The normal rules for interest on overdue corporation tax (under section 87A of the Taxes Management Act 1970) apply, but with a modification to the date from which interest runs.
• For assessments under section 710 (covering accounting periods beginning before the ownership change), interest runs from the date the tax originally became due and payable by the company X.
• For assessments under section 713 (covering accounting periods ending on or after the ownership change), interest runs from the date the tax originally became due and payable by either Y or the associated company, depending on which company's unpaid tax gave rise to the recovery assessment.