Income Tax (Earnings and Pensions) Act 2003 section 554Z11F

Provisional payments of tax: further provision

Section 554Z11F explains how provisional tax payments are treated when there are overlapping tax charges on the same underlying money or asset under the disguised remuneration rules, ensuring a single payment can count towards more than one liability and setting out rules for late payment interest if the provisional payment is later repaid.

• A provisional tax payment made towards an earlier charge that overlaps with a Chapter 2 charge automatically counts as a provisional payment towards the overlapping charge as well, and vice versa.
• Where a single Chapter 2 charge overlaps with multiple earlier charges, the provisional payment must be split between those charges on a just and reasonable basis.
• The dual-counting of a provisional payment prevents late payment interest from building up on both overlapping liabilities at the same time.
• If the provisional payment is later repaid, late payment interest is recalculated as though the provisional payment had never been made, covering the period from the date of the original payment to the date of repayment.