Introduction Details of the Section
3.Subsection (1) provides that managed payment plans are available in respect of income tax or corporation tax payments that must be made under Self Assessment. These are payments on account of income tax payable in accordance with section 59A of the Taxes Management Act 1970 (TMA); payments of income tax and capital gains tax payable in accordance with section 59B of TMA; and payments of corporation tax payable in accordance with section 59D of TMA. The scope of section 59D of TMA excludes those large companies which are subject to the quarterly instalment payment scheme.
4.Subsection (2) provides that a number of conditions must be satisfied prior to entering into a managed payment plan. Subsection (2)(c) allows the Commissioners for HMRC to apply further conditions.
5.Subsection (3) provides that managed payment plans are not available to companies which have entered into a group payment arrangement.
6.Subsection (4) provides that so long as the taxpayer pays the instalments in accordance with the plan, each instalment is treated as having been paid on the normal due date. This means that there will be no late payment interest or penalties on those agreed instalments that are paid after the normal due date.
7.Subsection (5) provides that if the taxpayer fails to pay an agreed instalment, those payments made up to the date of failure are still treated as paid on the normal due date. Later payments are outside the scope of the section and, from the date of the failure, will attract late payment interest and penalties as appropriate. Late payment interest will run from the normal due date and late payment penalties will run from the penalty date.
8.Subsection (6) provides that companies that do not pay the agreed instalments still benefit from credit interest, but only where the failure arises before the normal due date.
9.Subsection (7) provides that an officer of Revenue and Customs may notify the payer that payments made after the due date will not result in a penalty.
10.Subsection (8) provides that instalments paid before the due date are balanced by instalments paid afterwards if their time values as defined in subsection (10) are equal, or approximately equal.
11.Subsection (9) provides that the time value of instalments paid before and after the due date are aggregated for this purpose.
12.Subsection (10) provides that the time value of any particular instalment is the product of its amount and the period in days before or after the due date.