Commentary

V5.364A Harmonisation of interest charges

Part V5 Compliance, enforcement and appeals

V5.364A Harmonisation of interest charges

V5.364A Harmonisation of interest charges

Introduction

In June 2008, HMRC issued a consultation document which explored the case for harmonising and simplifying the rules on interest paid on late payments (as well as on interest charged on overpayments) across the range of taxes administered by them1. It considered the principles that might underpin a modern interest regime that is clear, simple and easy for taxpayers and their advisors to understand.

This consultation was followed by a further consultation document2 entitled “HM Revenue and Customs Interest – Working Towards a Harmonised Regime”, which set out specific proposals for harmonising the interest regime on overpayments and late payments, and sought feedback from taxpayers on each proposal. Proposals of relevance to VAT included—

  1.  

    (i)     the adoption of the Bank of England base rate as the starting point for calculating interest and the timing of interest rates in accordance with changes to the Bank of England base rate;

  2.  

    (ii)     the maintenance of differential rates for the charging and payment of interest.

Commencement

FA 20093 sets out the provisions arising from the consultation. It was announced, on 3 March 2021 as part of the Budget, that they would come

To continue reading
View the latest version of this document, as well as thousands of others like it, sign in to TolleyLibrary or register for a free trial