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HMRC internal manual

Self Assessment: the legal framework

Payment of tax: automatic interest and late payment penalties: miscellaneous provisions

Cash limit for magistrates’ proceedings

Section 65(1)

Under Self Assessment, tax and other amounts due, can be recovered by way of proceedings in a magistrates’ court providing the total amount due does not exceed £2,000.

Interest is charged on any sum due, including penalties and surcharge

Section 69

Once an amount has been added to the taxpayer’s statement of account, whether as tax, a surcharge or a penalty, it is treated as tax due and payable for collection and recovery purposes.

Payments by cheque

Section 70A

Any payment made by cheque is treated as having been made on the day the cheque is received (providing the cheque subsequently clears).

Rate of interest

FA89/S178- Regulations made under Section 103 FA 2009 (from 31 October 2011)

The rate of interest is calculated using a formula set by regulations. Rates change automatically when there is a change in the bank base rates.

The rate charged on late tax is in line with the average rate for borrowing. The rate paid on overpaid tax is in line with the average return on profits.