Supporting Guidance: employer compliance: guidance by subject: computations: calculating interest
Interest should be calculated for each year on the interest bearing duties, (COG908150), from the reckonable date to the expected date of payment.
The reckonable date is as follows
PAYE, Class1 NICs and deductions from subcontractors
- 19 April following the end of the year to which the payment relates. For the year ended 5 April 2008 the reckonable date would be 19 April 2008 except where arrears of pay have been paid for closed years (COG905185).
- interest runs from 19 July, rather than 19 April following the end of year.
Unless specifically requested there is no need to issue a copy of the interest calculation to the employer or contractor. However, it would be advisable to inform the employer or contractor of the daily rate of accrual of interest in cases where agreement to computations is not forthcoming.
- place a printout of the interest calculation within the case papers for reference.
If the employer objects to the inclusion of interest in the computation see COG915075