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HMRC internal manual

Inheritance Tax Manual

HM Revenue & Customs
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Remission of interest: guidelines in delay cases

These guidelines are intended to serve as indicators of the main lines to follow, although every case will need to be considered on its facts, and it could be that interest may fall to be remitted, or remission denied, because there are exceptional circumstances which warrant departing from the guidelines.

As such remission (IHTM30522) is not provided for by legislation, the main recourse for an aggrieved taxpayer would be judicial review. It is therefore important that we ensure decisions on remission of interest are made fairly and consistently under the guidelines and that any views expressed by the taxpayer are carefully considered.

Where there have been delays in dealing with a case over and above the target reply period of 15 days from receipt of correspondence and these delays are considered unreasonable, consideration must be given to waiving interest for the period of the delay.

There is no definition of what represents unreasonable delay; it will depend on the circumstances of each case.

Our need to seek advice or information adds to the time taken to answer taxpayers, but it is possible that this could have been obtained, and the matter resolved, within 15 working days. If the consultation process leads to delay, you should check that, given the type of case, there was nevertheless a good reason why it took so long. For example, complex questions requiring a lot of research or advice may lead to some delay in replying substantively to the taxpayer. But this may not be unreasonable if we have kept the taxpayers fully informed of what we were doing. Conversely, if the matter is more straightforward there may not have been a good reason why it has taken longer than 15 working days to reply.

You must remember when we are considering whether there has been any delay that a simple acknowledgement does not mean that we have dealt with a piece of correspondence.

Where the delay is considered unreasonable you must remit interest for those periods of delay.

Periods before the due date (IHTM30151) should be included in calculating the total delay but should not be included in the interest remission calculation.