VDIM8020 - How to inhibit, amend or withdraw interest, Amending interest following misappropriation of a remittance

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.

It is likely that misappropriation will only come to light when a taxpayer receives an assessment of further interest but has already sent payment in respect of the interest bearing tax.

Where misappropriation has led to an excessive interest charge in this way, a completed VAT 915 must be sent to Accounting and Adjustments (This content has been withheld because of exemptions in the Freedom of Information Act 2000) with full details of the amounts to be re-appropriated.

They will carry out the instructions and the interest calculation record will be updated the next time the mainframe computer further interest suite looks at the assessment.

Corrective action should be taken before interest is amended for any other reason, so that any interest distortion will not be made worse.