VDIM7060 - When to inhibit, amend or withdraw interest: Complicated retrospective agreements

This guidance deals with interest matters in respect of prescribed accounting periods starting on or before 31 December 2022. Interest matters with effect from 01 January 2023 are dealt with under Finance Act 2009.

Please see Compliance Handbook page CH140000 onwards to find the new interest rules guidance.

There may be occasions where you enter into retrospective arrangements with taxpayers, for example the revised partial exemption scheme.

Where we have no powers to enforce backdating and it is applied from an earlier date purely by mutual agreement, an error correction will be needed to correct the VAT.

In these circumstances it would be unreasonable to charge interest and an inhibit is therefore appropriate.