Income Tax Act 2007 section 239

Date from which interest is chargeable

Section 239 sets the date from which interest on overdue tax begins to run when Enterprise Investment Scheme (EIS) relief is withdrawn or reduced following an assessment.

• When EIS relief is withdrawn or reduced by assessment, interest on the resulting tax liability runs from 31 January following the end of the tax year to which the assessment relates
• This interest date applies specifically where the withdrawal or reduction arises from breaches of listed EIS conditions, such as the investor connection requirement, linked loans requirement, or company qualification rules
• The relevant triggers also include disposal of shares, exercise of put options, receipt of value by the investor, repayment of share capital, and acquisition of a trade or share capital by the company
• The interest charging mechanism aligns with the standard self-assessment interest rules under section 86 of the Taxes Management Act 1970, treating the relevant date as 31 January after the relevant tax year