Commentary

A4.621 Income tax and capital gains tax

Administration and compliance

A4.621 Income tax and capital gains tax

A4.621 Income tax and capital gains tax

Both before and after the FA 2009 rule changes, a charge to interest arises automatically on a late payment in respect of1:

  1.  

    (a)     a payment on account (see E1.251)

  2.  

    (b)     a balancing payment (see E1.252)

  3.  

    (c)     tax due on an amendment to a self assessment tax return, whether made by the taxpayer or by an HMRC officer (see E1.213, E1.214)

  4.  

    (d)     tax charged in a 'discovery' assessment (see A6.701)

  5.  

    (e)     tax payable following an appeal and a postponement application (see A4.609, E1.268)

Late payment interest start date

Under the FA 2009 harmonised regime, a payment within the regime carries interest from the 'late payment interest start date' until the date on which payment is made. Subject to what is said below, the late payment interest start date in respect of any amount is the date on which that amount becomes due and payable (regardless of whether or not it is a business day)2.

The pre-FA 2009 rules stated that interest ran from the 'relevant' date to the date of payment3. In a case within (a) above the relevant date is 31 January in the tax year or 31 July in the following year. In a case within (b) above, where the taxpayer gives notice of liability within six months of the end of the tax year and a notice to file a return is not issued to him until after 31 October following the end of that year, the relevant date is

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