Taxes Management Act 1970 section 87A

Interest on overdue corporation tax, etc.

Section 87A sets out the rules for charging interest on corporation tax that is paid late, including special provisions where losses or deficits are carried back to reduce the tax liability of an earlier period.

• Corporation tax that is not paid on time carries interest from the due date until the date of actual payment, even if the due date falls on a non-business day such as a weekend or bank holiday.
• Where HMRC assesses a person other than the company for unpaid corporation tax (for example, under group or successor company provisions), interest runs from the date the tax originally became due and payable by the company itself.
• When a non-trading loan relationship deficit or a trading loss is carried back to an earlier accounting period, the tax reduction in that earlier period is ignored for interest purposes up to the date that corporation tax for the later period became (or would have become) due — meaning interest still accrues on the earlier period's tax until that point.
• For the purposes of these carry-back rules, corporation tax for any accounting period is treated as becoming due and payable on the day after nine months from the end of that accounting period, and Treasury powers to change the normal due date for corporation tax do not alter this fixed nine-month reference point.