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PRESCRIBED INTEREST RATE CHANGE FOR VAT PURPOSES

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A treasury Order (SI 1993/3168) was laid before the House of Commons on 17 December 1993 and will come into force o...
A treasury Order (SI 1993/3168) was laid before the House of Commons on 17 December 1993 and will come into force on 6 January 1994 a statement from Customs and Excise said today. This order reduces the prescribed rate of interest from 6.25% to 5.50% Interest for VAT underdeclared on returns was introduced on 1 April 1990, and is covered by Section 18 of the Finance Act 1985 (interest on tax recovered or recoverable by assessment).

Section 18(8) of the Finance Act 1985 provides that the 'prescribed rate' for the purpose of charging interest on VAT underdeclared on returns shall be set by Treasury Order. The interest rate is the same as the rate set by the Inland Revenue under the Main Taxes Act Provisions.
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