Introduction Background Note
8.The EIS is designed to help smaller higher-risk trading companies to raise finance by offering a range of tax reliefs to investors who purchase new shares in those companies.
9.Subsections (1) to (3) remove an anomaly where the due dates for interest on any income tax due when relief under the EIS is withdrawn differed from the due date for income tax self assessment. Removing this anomaly is a step towards harmonising when interest becomes due across taxes.
10.Subsections (4) and (5) are designed to bring IHT, capital transfer tax and estate duty in line with all other taxes where HMRC charge and pay interest so that the new harmonised interest rates can be applied across all taxes.
11.Subsection (6) removes the requirement for HMRC to change interest rates by Order. This enables HMRC to set interest rates in line with changes announced by the Bank of England, offering greater transparency.