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HMRC internal manual

Compliance Handbook

Interest: Late payment interest: Special provisions: Special provisions for start dates: Amounts postponed due to appeal - example

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.

An enquiry into Sebastian’s 2012-13 ITSA return resulted in his tax liability increasing from £20,000 to £28,000.

Sebastian appealed against some of the conclusions of the closure notice and asked for payment of £5,000 of the additional tax to be postponed. He paid the balance of £3,000.

All of the additional £8,000 is due to be paid as a balancing payment on 31 January 2014.

If Sebastian’s appeal is successful to any extent then some or all of the £5,000 will not be payable, and therefore there will be no late payment interest on that amount. To the extent that his appeal is unsuccessful, some or all of the £5,000 will become payable. The late payment interest start date for that amount is the same as for the original assessment. Here, assuming that there was no claim to reduce the payments on account, the additional tax is part of the balancing payment, and therefore the late payment interest start date is 31 January 2014.