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HMRC internal manual

VAT Default Interest Manual

Calculation of interest: How to access and read an Interest Calculation Record (ICR)

How to access the record

To access an ICR on VISION you will need the relevant Officer’s Assessment (OA) reference number. When you have located the assessment

  • the OA details will show the amount of any interest charged, the amount of any further interest and the date that the next further interest computer run will take place. If the next run date shows “99/99/99,” this indicates that the amount of interest bearing tax has been paid in full and no further interest will be calculated
  • key “I” to view a detailed breakdown of the interest charged.

How to read the information

The ICR details exactly how interest has been calculated by showing a breakdown of the individual amounts that combine to produce the overall figure. It is made up of various rows and columns, each showing specific information as to how the interest has been calculated. Most ICR’s have several lines each of which represent an event that affects the calculation of interest. Each time a different event happens a new line is created and a code is allocated to show the event. The following are columns on the ICR

  • START DATE - this will show the date that interest begins to run for any particular line of an ICR. The START DATE for one line indicates the end of the previous one.
  • NUM DAYS - this shows the number of days that have elapsed between each line of the ICR and therefore the number of days between each event that affected the interest calculation.
  • INT LIAB AMOUNT - this is the actual amount on which interest has been charged between the dates indicated. This amount can be a credit as well as a debt figure and is illustrated by a “CR” or “DB” legend.
  • INT RATE - the rate at which interest is being charged. There have been numerous changes to this rate since the introduction of the interest regime. If the line has been included in VAT 663 action, see VDIM6000 the rate will read “0.00%.”
  • INT DUE - the amount of interest charged between the two dates. This amount is always on the same line as the start date for any particular event on the ICR.
  • INT TOTAL - this is a build up of all the previous lines.
  • CODE/INH IND - this code shows the type of event that affected the calculation of interest and created a new line on the ICR. For a list of these codes and explanations see VDIM5120. The list also shows whether or not the line is inhibited.

How the information can be used

By examining the lines on the ICR you can see how the interest has accumulated. This is most important when you need to complete a VAT663 to increase or reduce interest. It can also be useful where

  • you need to explain in detail how interest has been calculated, for example where taxpayers request a breakdown of how interest has been charged, or where they are disputing an amount, or
  • too much or too little interest has been calculated and you need to find out why.