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The rate of tax interest on corporation tax assessments will return fully to its previous level of 8% with effect from 1 January 2022.
Offer valid until 1 November
If you still owe income tax or corporation tax for 2020 and have not yet filed your tax return, or if you have not applied for a provisional assessment at the correct rate, we advise you to apply for a (further) provisional assessment from the Tax and Customs Administration as soon as possible. This is particularly important for corporation tax assessments, as you can then avoid a high rate of tax interest (8%) applicable from 31 December 2021.
From 1 July 2021, the Tax and Customs Administration will charge tax interest on any outstanding income tax and corporation tax for 2020. If your tax assessments have not yet been finalised or have not been set at a sufficiently high level, please take action as soon as possible.
If an application for a provisional corporation tax assessment is submitted before 1 November, it is expected that the assessment will be issued before 31 December 2021.
Back to normal
In our article Tax interest: better to avoid it We have indicated that the tax rate had “returned to normal” following a period during which it stood at 0.01%. We stated at the time that the tax rate would be increased again to 4% for both income tax and corporation tax. For corporation tax, this is now followed by a further increase to 8%.