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HMRC internal manual

Compliance Handbook

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HM Revenue & Customs
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Interest: Late payment interest: Special provisions: Effect of interest on reliefs: Relief by repayment - 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.

Zachery made a balancing payment of £4,000 on the basis of his 2013-14 self-assessment. Zachery was charged late payment interest on this amount because he did not make the payment until 1 May 2015 instead of the due date of 31 January 2015.

An enquiry into Zachery’s self-assessment concluded that the balancing payment should have been only £3,000. His return was amended and the difference of £1,000 was repaid on 1 August 2015.

Therefore, the late payment interest charged on the balancing payment is recalculated from 31 January 2015 until 1 May 2015, as though only £3,000 was due on 31 January 2015. The late payment interest that was charged for that period on the difference of £1,000, and which Zachary paid, is refunded to him.

Zachery will also receive repayment interest on £1,000 from 1 May 2015 until 1 August 2015, see CH146040.

FA09/SCH53/PARA16