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HMRC internal manual

COTAX Manual

From
HM Revenue & Customs
Updated
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Interest: how interest is calculated: common period rules

Introduction

If:

  • a potential CT repayment is to be allocated against CT arrears, but not interest or penalties and
  • there is a common period during which the repayable tax is attracting repayment interest or has attracted credit interest and
  • the CT arrear will attract credit, debit or late payment interest

then COTAX applies common period rules.

The following action guides, and explain how COTAX applies the rules in different circumstances.

  • COM80210 relates to reallocating from tax to tax when the receiving AP is not a QIP case.
  • COM80220 relates to reallocating from tax to tax when the receiving AP is a potential or definite QIP.
  • COM80230 relates to reallocating from tax to either penalty or interest, regardless of the QIP status of the receiving AP