Indexation

Retail price index: January 2011           229.0

Inflation rate: January 2011                  5.1%

Indexation factor from March 1982:

to April 1998                                       1.047

to December 2010                               1.875

to January 2011                                  (not yet announced)                    

Interest on Overdue Tax

Interest on all unpaid tax is charged at the same rate.

The formula is Bank base rate plus 2.5% which gives a present rate of 3%.

There is one exception: Quarterly instalments of corporation tax bear interest at only 1.5%.

Repayment Supplement

Interest on all overpaid tax is payable at the same rate.

The formula is Bank base rate minus 1% but with an overriding minimum of 0.5% which applies at the present time.

Official Rate of Interest: From 6 April 2010                     4%