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HMRC internal manual

Air Passenger Duty

Penalties/interest and debt management: Interest on officers' assessments and voluntary disclosures

Interest on officers’ assessments and voluntary disclosures

Interest may be charged on underdeclarations of duty. The computer will automatically calculate the interest charge on all officers’ assessments and voluntary disclosures.

Traders are not charged interest on:

duty declared on returns;

  • central assessments;
  • penalties;
  • interest previously charged but not yet paid; and
  • amendments made to APD returns before they can be fully processed.

Traders are not paid interest for any overdeclarations, but these will be taken into account when calculating the interest liability for an under/overdeclaration which has occurred in the same accounting period provided they are recorded on the same input document. It is therefore important that whenever possible, under and overdeclarations are notified at the same time.

Rate of interest

The rate of interest is set by the Treasury and is geared to commercial lending rates.

Period of interest charge

Interest will be charged from the return due date of the accounting period being assessed. Interest is calculated up to the day before the issue date of the assessment or voluntary disclosures. Any delay in issuing an assessment or voluntary disclosure can increase the interest charged. It is important that the assessment or voluntary disclosure is issued at the earliest possible opportunity. Interest will continue to be charged until the interest bearing duty is paid in full.

Interest inhibits

It is possible to inhibit the calculation of interest on any officer’s assessment or voluntary disclosure. The circumstances which give rise to an interest inhibit are very rare. In order to inhibit interest the “interest inhibit indicator” on the APD641 (Officer Assessment Form) should be set. You should contact the CAT to discuss the case if you are considering such an inhibit.

Further interest

If traders fail to pay all the interest bearing duty on an assessment or voluntary disclosure within 30 days of the issue of the notification, they will enter a further interest regime. Interest will continue to be charged and notified on a monthly basis until all the interest bearing duty is paid.