Commentary

A4.630 Income tax and capital gains tax

Administration and compliance

A4.630 Income tax and capital gains tax

A4.630 Income tax and capital gains tax

A repayment by HMRC of any of the following is increased by 'repayment interest'1:

  1.  

    (a)     a payment on account of income tax under TMA 1970, s 59A (see E1.251)

  2.  

    (b)     a payment of income tax by or on behalf of an individual for a year of assessment

  3.  

    (c)     a surcharge under TMA 1970, s 59C (see A4.565)

  4.  

    (d)     a penalty under any of the provisions of TMA 1970, and

  5.  

    (e)     a payment of capital gains tax

Interest on repayments of income and capital gains tax is not taxable.

A repayment under head (b) above includes a repayment of tax deducted at source, including tax under PAYE.

Note that repayment interest was formerly given on a concessionary basis, under ESC A51, where life assurance premium relief (prior to its abolition; see E1.1300) was repayable under certain circumstances. From 1 April 2011 this was on a statutory footing2.

The amount of the interest is equal to interest on the amount repaid from the relevant date to the date of issue of the repayment order at rates

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