Commentary

V7.288 Charging of interest on errors

Part V7 Tax planning
Part V7 Tax planning | Commentary

V7.288 Charging of interest on errors

Part V7 Tax planning | Commentary

V7.288 Charging of interest on errors

In general terms, HMRC only charges interest where that interest represents 'commercial restitution', ie compensation for the loss of use of any underpaid tax. HMRC normally only charge interest if it has been deprived of this money for a period of time. It would not, for example, normally charge interest on an output tax underpayment that would have been reclaimed as input tax by a third party.

HMRC uses the following guidelines to decide if an interest charge for commercial restitution is appropriate, usually when either an officer assessment is raised or an error notification

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