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HMRC internal manual

Compliance Handbook

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HM Revenue & Customs
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Interest: Repayment Interest: General rule - 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. 

Repayment of amounts paid to HMRC
Overpayment of amounts on the making of a return or claim

Repayment of amounts paid to HMRC

Russell made the following two payments on account for his 2014-15 self-assessment. The payments were based on his liability for the previous year.

  Due date Amount Date paid Amount paid
         
Payment on account  31 January 2015  £15,000  28 January 2015  £15,000
Payment on account  31 July 2015  £15,000  27 July 2015  £15,000

When Russell submitted his self-assessment for 2014-15 his actual liability for the year was £24,000.

According to the allocation of payments rule, see CH146100, the amount we refund comes, in two equal parts, from the two payments on account. We refunded the overpayment of £6,000 on 1 March 2016.

The repayment interest that we pay is based on the information below.

Amount on which repayment interest is payable Period for which repayment interest is paid
   
£3,000 31 January 2015 to 1 March 2016
£3,000 31 July 2015 to 1 March 2016

Here, Russell paid the payments on account a few days early, but the repayment interest start dates are the dates on which the amounts were due and payable.

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Overpayment of amounts on the making of a return or claim

We haven’t’ provided an example because this general rule does not apply to any of the taxes that currently use the FA 2009 interest provisions, see CH140160.

FA09/S102

FA09/SCH54/PARA2
FA09/SCH54/PARA3
FA09/SCH54/PARA4