(1) Simple interest at the rate of 1 per cent per month or part of a month, without any deduction of income tax, shall be payable on tax from the date upon which it becomes due and payable until the date of payment and shall be chargeable and recoverable in the same manner as if it were part of the tax; but interest shall not be payable unless the total amount thereof exceeds £5.

(2) A payment on account of tax shall be applied -

(a) if there is interest due on tax at the date of the payment, to the discharge, so far as may be, of the interest so due, and

(b) if there is any balance of that payment remaining, to the discharge of so much tax as is equal to that balance.

(3) Subject to subsections (1) and (2), payments on account of tax due on any date may be made at any time after that date, whereupon interest on so much of the payment on account as is referable to tax shall cease to run.

(4) Interest payable under this section shall not be allowed in computing any income, profits or losses for any of the purposes of the Tax Acts.