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HMRC internal manual

Compliance Handbook

Interest: Late payment interest: Deduction of income tax

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.

Late payment interest must be paid to HMRC without deducting income tax from the payment.

Note that this contrasts with some other payments of yearly interest that have to be made under deduction of income tax.