ANNEX 1:: MINOR CHANGES IN THE LAW MADE BY THE BILL This change has no implications for the amount of tax due, who pays it or when. It affects (in principle and in practice) only administrative matters. Change 136: Deduction of tax: statutory interest: section 888
This change makes specific provision that payments of “statutory interest” are not subject to deduction of tax under section 874.
The Late Payment of Commercial Debts (Interest) Act 1998 requires payment of “statutory interest” in certain circumstances. Tax Bulletin 42 (August 1999, interpretations) indicated that where such interest is paid, it would not be regarded as yearly and would not, therefore, be subject to deduction of tax under section 349(2) of ICTA.