ACCA Strategic Professional · Advanced Taxation (UK) · Taxation effects of the financial decisions made by businesses and individuals
A company underpays corporation tax and pays it late. According to the assumed rates in the ATX-UK tax tables, which rate of interest is charged on the underpaid tax?
Underpaid tax carries interest at 8.50% under the assumed rates in the ATX-UK tables. The 3.50% rate applies to overpaid tax and 3.75% is the official rate of interest.
- A8.50%Correct
- B3.75%
- C3.50%
- D25%
Explanation
The tables give 8.50% for underpaid tax, 3.50% for overpaid tax and 3.75% as the official rate used for beneficial loans. Using the overpaid rate is the usual confusion.
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