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HMRC internal manual

Debt Management and Banking Manual

From
HM Revenue & Customs
Updated
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Interest: interest on late payments: charging interest on Customs Duty

Overview

Legislation makes it mandatory for HMRC to charge interest on Customs Duty that is paid late. Interest should be charged from the day after the due date until the day before the duty is paid. If the duty is paid within 5 days of it becoming due, the interest charge is normally waived. If the duty remains unpaid on the following day, a £25 minimum interest charge will have accrued (or 5 days’ interest if that amounts to more than £25) and interest will continue to increase until the duty is paid.

Actions by NDPU Liverpool

On receipt of form C18 from Grimsby notifying an overdue Customs Duty debt, NDPU Liverpool will

  • set up the customs duty charge on IDMS
  • send the customer a standard letter

    • explaining that interest is charged on late paid custom duty under the provisions of Article 232 of Council Regulation (EEC) No 2913/92 establishing the Community Customs Code and Section 126 of the Finance Act 1999
    • setting out how much interest has accrued to date and the daily rate
    • requesting payment.

If subsequent contact has to be made with the customer to try to obtain payment, NDPU will inform the customer of the revised amount of interest accrued.

When the customs duty debt is paid in full, NDPU will:

  • calculate the interest due from the day after the due date to the day before payment
  • add the interest charge to IDMS and
  • issue a notice to pay interest letter.

When a Customs Duty debt remains unpaid NDPU will refer it for appropriate enforcement action as normal.

Actions by FF, BEU, DM Scotland and EIS

When an unpaid customs Duty is referred by NDPU, it will be the responsibility of FF, BEU, DM Scotland or EIS to calculate interest from the day after the due date to the date of enforcement.

Objections to interest

There is no appeal route for disputes about interest. But we will, in certain circumstances, consider giving up some or all of the interest if a customer objects to the charge and a review identifies that an HMRC mistake or unreasonable action contributed to some or all of the build-up of interest.

Existing guidance at DMBM404000 and DMBM405000 applies. Initially an objection will be dealt with by NDPU Liverpool. If they are unable to resolve it, they will refer to the IRU.