Section 357YC — Corporation Tax Act 2010: Meaning of “restitution interest”

Meaning of “restitution interest” 357YC 1 In this Part “ restitution interest ” means profits in relation to which Conditions A to C are met.

2 Condition A is that the profits are interest paid or payable by the Commissioners for Her Majesty’s Revenue and Customs in respect of a company’s right (or possible right) to restitution with regard to either of the following matters (or alleged matters)—

a the payment of an amount to the Commissioners under a mistake of law relating to a taxation matter, or b the unlawful collection by the Commissioners of an amount in respect of taxation.

3 Condition B is that—

a a court has made a final determination that the Commissioners are liable to pay the interest, or b the Commissioners have in final settlement of a claim in respect of the right (or possible right) mentioned in subsection (2) entered into an agreement under which a person is entitled to be paid, or is to retain, the interest.

4 Condition C is that the interest determined to be due, or agreed upon, as mentioned in subsection (3) is not limited to simple interest at a rate equivalent to or lower than a statutory rate (see section 357YU).

5 Subsection (4) does not prevent so much of an amount of interest determined to be due, or agreed upon, as represents or is calculated by reference to simple interest at a rate equivalent to or lower than a statutory rate from falling within the definition of “restitution interest”.

6 For the purposes of subsection (2) it does not matter whether the interest is paid or payable—

a pursuant to a judgment or order of a court, b as an interim payment in court proceedings, c under an agreement to settle a claim, or d in any other circumstances.

7 For the purposes of this section—

a “ interest ” includes an amount equivalent to interest, and b an amount paid or payable by the Commissioners as mentioned in subsection (2) is “equivalent to interest” so far as it is an amount determined by reference to the time value of money.

8 For the purposes of this section a determination made by a court is “final” if the determination cannot be varied on appeal (whether because of the absence of any right of appeal, the expiry of a time limit for making an appeal without an appeal having been brought, the refusal of permission to appeal, the abandonment of an appeal or otherwise).

9 Any power to grant permission to appeal out of time is to be disregarded for the purposes of subsection (8).