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HMRC internal manual

Compliance Operational Guidance

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HM Revenue & Customs
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Alternative rights of recovery (PAYE directions): further action when a direction seems appropriate: interest considerations under the SA system

As indicated at COG931690, each separate charge entered onto the taxpayer’s statement of account attracts interest. As the relevant date is determined by the year involved, each tax charge has to be entered separately for each year.

In respect of the Section 59B ‘balancing’ payment, the relevant date for Section 86 interest is 31 January next following the year of assessment, whereas the Regulation 72(7)/ Regulation 81(6) interest date is 19 April following the end of the tax year. There is accordingly a period, 19 April – 31 January, which needs to be accounted for when considering the interest position following a direction.

Amend relevant dates

Under the SA system there is a function ‘AMEND RELEVANT DATES’ which allows the relevant date to be moved from 31 January to the preceding 19 April. If used, interest will be charged automatically and seamlessly from 19 April to the date of payment, though the charging provisions will remain 72(7)/ Regulation 81(6) and Section 86. You should use this function where the interest will only affect the employment income from this source.

If, following an enquiry, more Section 59B tax is being put into charge for a year where its components have different relevant dates

  • do not change the relevant date from 31 January.

Instead raise a gap interest charge as indicated at COG932280.