120KBC Interest for AIM method provisional taxpayers

(1)

This section applies if, for a tax year,—

(a)

a person is liable to pay provisional tax for the tax year and uses the AIM method described in section RC 5(5B) of the Income Tax Act 2007; and

(b)

there is no provisional tax interest avoidance arrangement in relation to the person.

(2)

If the person pays the amount of all 6 or 12 instalments, as applicable, on the instalment dates for the tax year in accordance with sections RC 9 and RC 10B of the Income Tax Act 2007, then, despite section 120KB(2) of this Act,—

(a)

the person’s residual income tax for the tax year is not due and payable as set out in section RC 9 of the Income Tax Act 2007; and

(b)

the amount of their residual income tax minus the total amount paid in relation to the instalments for the tax year is due and payable in 1 instalment on their terminal tax date.

(3)

If the person fails to pay the amount of an instalment on the relevant instalment date for the tax year (a failed instalment) in accordance with sections RC 9 and RC 10B of the Income Tax Act 2007, then, despite section 120KB(2) of this Act, the person’s residual income tax for the tax year is not due and payable as set out in section RC 9 of the Income Tax Act 2007 for the instalment date.

Section 120KBC: inserted, on 1 April 2018 (applying for the 2018–19 and later income years), by section 54(1) of the Taxation (Business Tax, Exchange of Information, and Remedial Matters) Act 2017 (2017 No 3).