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ACCA Applied Skills · Taxation (UK) · The comprehensive computation of corporation tax liability

Using the assumed interest rates in the tax tables, what annual rate of interest is charged on corporation tax paid after its due date?

Interest on corporation tax paid late is charged at 8.50% a year, the rate on underpaid tax in the tax tables. The 3.50% rate applies to overpaid tax refunded to the company, and 3.75% is the official rate for beneficial loans.

  1. A3.75%
  2. B8.50%Correct
  3. C3.50%
  4. D10.00%

Explanation

The tax tables give 8.50% as the rate of interest on underpaid tax. Tax paid late is underpaid tax for the period between the due date and the payment date. 3.50% is the rate on overpaid tax, which is paid to the taxpayer. 3.75% is the official rate used for beneficial loans.

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