Taxes Management Act 1970 section 91

Effect on interest of reliefs

Section 91 deals with how interest charges on overdue tax are adjusted when a taxpayer subsequently receives tax relief, whether by discharge of tax or by repayment.

• When tax relief is given by discharging part of an assessed tax liability, the interest charged on overdue tax must be recalculated as though the discharged tax had never been charged, and any overpaid interest must be repaid.
• Where relief is given by way of a tax repayment, the taxpayer can elect to have that repayment treated as a discharge of tax charged for the same period, thereby reducing the interest due — but the repayment cannot be set against assessments made after the relief was given, nor can it partially reduce more than one assessment.
• Relief will not affect income tax charged under Schedule A or Schedule D if it arises from income taxable under other schedules, and it will not affect tax charged at rates other than the basic rate (or equivalent Scottish, Welsh, savings nil, or starting rates for savings) on income from which tax has been deducted, unless the relief specifically relates to that tax.
• Relief from corporation tax or capital gains tax is only treated as affecting an assessment if that assessment is to the same type of tax.