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HMRC internal manual

VAT Default Interest Manual

Notices: Notices of further interest - use of VAT658

When taxpayers fail to pay the full amount of interest bearing tax on an assessment or error notification within the 30 days allowed, a notice of further interest is issued on form VAT658 direct from the Shoebury computer centre. A separate VAT658 or VAT659, see VDIM11000, is issued for each assessment or error notification which has not been paid in full. The notification is issued at 30 day intervals, subject to time limits, until the tax is paid in full.

De minimis

A de minimis rule is applied to further interest if the total amount of interest and further interest does not exceed £5. The computer does not issue a VAT658 or VAT659 unless the sum involved exceeds the de minimis amount of £5, this may be brought about at some point in the future by an interest run on the main frame computer.

Contents and Layout

The VAT658 has two sections

  • Notice of Assessment of Further Interest (VAT658)
  • Remittance Slip (VAT658A)

The following information is shown on the document

  • Taxpayer’s name and address
  • LVO code
  • Registration Number
  • Officer’s assessment reference number
  • Date -This is the run-date of the further interest computer suite. This will probably not be the date up to which interest has been charged.
  • The period for which further interest is payable.
  • Current rate of interest - This is the rate of interest in force at the time of issue of the VAT 658 although it is possible that more than one interest rate has been used to calculate the interest.
  • Current amount of tax outstanding at the time of the further interest run.
  • Amount further interest due (assessed on the notice).
  • Remittance slip VAT 658A - to be detached by the taxpayer and returned to the VAT Central Unit with payment.

When the taxpayer pays the outstanding tax it is unlikely to coincide with the further interest computer run date. This normally means there is a short period when interest has not been charged. If the amount exceeds the £5 de mimimis limit it will be notified to the taxpayer on a VAT659.