V5.364 Assessment of interest

HMRC may assess the amount due by way of interest and notify it to the person concerned1. The discretion afforded to HMRC by the use of the word “may” is generally exercised by the waiving of interest where it does not represent “commercial restitution”, ie where no tax has been lost, or its collection delayed, as a result of the default2.

Interest is paid without deduction of income tax3.

Interest is assessed by reference to the prescribed accounting period in respect of which the tax or amount assessed as tax was due4. If the tax by reference to which interest is calculated cannot readily be attributed to one or more prescribed periods, it is treated as tax due for such period(s) as HMRC may determine to the best of their

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