CH140280 - Interest: payments by instalment
You must check whether, and from which date, the FA 2009 interest rules apply to the tax or duty you are dealing with. See CH140160 for full details.
HMRC charges late payment interest on amounts which remain unpaid after the due and payable date.
Where an amount is paid in instalments (including under a Time to Pay agreement with HMRC), late payment interest continues to be charged on the reduced balance until the tax has been paid in full.
VAT Annual Accounting Scheme
Late payment interest on amounts payable under the VAT Annual Accounting Scheme (Article 1A, S.I. 2022/1298 and Regulation 49 to 55 of the VAT Regulations 1995) does not apply to individual instalments but is charged on any amount which remains unpaid after the due date of the balancing payment for the prescribed accounting period.