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HMRC internal manual

COTAX Manual

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HM Revenue & Customs
Updated
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Interest: how interest is calculated: introduction

For a CTSA AP

  • Late payment interest is charged under Section 87A TMA 1970 on CT paid late.
  • Debit interest is charged under Section 87A TMA 1970 (as extended by Regulation 7 of the Corporation Tax (Instalment Payments) Regulations 1998 (SI 1998 No. 3175)) on quarterly instalment payments made late.
  • Credit interest is paid under Section 826 ICTA 1988 (as extended by Regulation 8 of the Corporation Tax (Instalment Payments) Regulations 1998 (SI 1998 No. 3175)) on amounts paid before the due date and on early payment or overpayment of quarterly instalment payments. For more information see section ‘Quarterly Instalment Payments’ (COM95000) in the business area ‘Payments’.
  • Repayment interest is paid under Section 826 ICTA 1988 on amounts repaid and reallocated.

For a CT Pay and File AP

  • Late payment interest is charged under Section 87A TMA 1970 on CT paid late.
  • Repayment interest (RPI) is paid under Section 826 ICTA 1988 on amounts repaid or reallocated. For more information see business area ‘Repayments / Reallocations’.

Interest is not charged on either:

  • penalties or interest itself or
  • tax which is stood-over or suspended.

See COM129000 for guidance on when to contact the CT Unit in Cumbernauld.