Citation and commencement

1. These Regulations may be cited as the Taxes and Duties (Interest Rate) Regulations 2010 and come into force on 31st August 2010.

Interpretation

2. In these Regulations—

“Bank of England rate” means the official bank rate as announced at the relevant meeting;

“operative date” means the 13th working day following the relevant meeting;

“relevant meeting” means the most recent meeting of the Bank of England Monetary Policy Committee( 2 );

“working day” means any day other than a non-business day within the meaning of section 92 of the Bills of Exchange Act 1882( 3 ).

Late payment interest rate

3. —(1) Except where regulation 5 applies, the late payment interest rate for the purposes of section 101 of the Finance Act 2009 (late payment interest on sums due to HMRC), is the percentage per annum found by applying the following formula—

Bank of England rate + 2.5.

(2) The interest rate found under paragraph (1) applies on and after the operative date.

Repayment interest rate

4. —(1) Except where regulation 5 applies, the repayment interest rate for the purposes of section 102 of the Finance Act 2009 (repayment interest on sums to be paid by HMRC), is the higher of—

(a) 0.5% per annum; and

(b) the percentage per annum found by applying the following formula—

Bank of England rate – 1.

(2) The interest rate found under paragraph (1) applies on and after the operative date.

Initial rates of interest

5. —(1) This regulation applies immediately on the coming into force of these Regulations until the first operative date after the coming into force of these Regulations.

(2) The late payment interest rate and repayment interest rate shall be the respective percentages per annum found by applying regulation 3(1) and regulation 4(1) as if the references in those regulations to the Bank of England rate were references to the official bank rate announced at the meeting of the Bank of England Monetary Policy Committee on, or most recently before, the 13th working day before the coming into force of these Regulations.

Effect of change in rates of interest

6. Where the late payment interest rate or repayment interest rate changes in accordance with these Regulations with effect from an operative date, the change has effect in respect of interest running from before that date as well as interest running from or after that date.