The following Owner-Managed Businesses guidance note by Tolley provides comprehensive and up to date tax information covering:
Interest on tax underpaid is a compulsory charge set out in tax legislation to reflect the interest which would have accrued to the Exchequer had the correct amount of tax been paid.
There is currently a harmonised regime in respect of interest for the late payment of tax which applies across most taxes, with the exception of corporation tax. The interest rate regulations for corporation tax purposes effectively mirror the harmonised regime. Both rules apply a single rate of simple interest on late payments.
The Taxes Management Act 1970 provides that tax ‘shall carry interest’ at the late payment rate from the late payment interest start date until the date of payment. As a result, there is an automatic charge to interest applied on any tax paid late.
A charge to interest can therefore arise in respect of:
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