What does section 2 of the Provisional Collection of Taxes Act 1968 do?

Section 2 validates payments and deductions made within one month after a temporary tax expires, treating them as legally valid while Parliament considers renewal. If the House of Commons does not pass a renewal resolution within that period, or the resolution loses effect, all collected amounts must be repaid to the taxpayer.

What happens if Parliament renews a temporary tax at a different rate under section 2 PCTA 1968?

If Parliament renews the tax at a different rate or with modifications, any overpayment — the difference between what was collected under the old terms and what would be due under the new terms — must be repaid or made good. Taxpayers only bear the burden of the tax as actually renewed by the House of Commons.

How is a temporary tax defined under section 2 of the Provisional Collection of Taxes Act 1968?

A temporary tax is one imposed, renewed, or reimposed for a limited period of no more than 18 months that was either in force during or imposed during the previous financial year. This definition distinguishes temporary taxes from permanent ones and limits the scope of the one-month grace period mechanism.

What is the one-month grace period under section 2 PCTA 1968 and when does it apply?

The one-month grace period allows payments and deductions on account of an expired temporary tax to be treated as legally valid if made within one month of expiry. This covers the practical gap before Parliament formally renews the tax, provided the payment would have been lawful had the tax remained in force.

Provisional Collection of Taxes Act 1968 section 2

Payments and deductions made on account, and before renewal, of any temporary tax within section 1

Section 2 deals with payments and deductions made during the gap period after a temporary tax has expired but before it is renewed by Parliament, treating them as valid subject to certain conditions.

Payments or deductions made within one month after a temporary tax expires are treated as legally valid, provided the tax falls within the scope of section 1.
If the House of Commons does not pass a renewal resolution within that one-month window, or if such a resolution loses its statutory effect, all amounts paid or deducted must be repaid or made good.
If the tax is ultimately renewed at a different rate or with modifications, any overpayment — that is, any amount that would not have been properly payable under the new terms — must be repaid or made good.
A "temporary tax" for these purposes is one imposed or renewed for a limited period of no more than 18 months, which was in force or imposed during the previous financial year.

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