A4.630 Interest on overpaid tax and tax paid early—income tax and capital gains tax
A repayment by HMRC of any of the following is increased1 by 'repayment interest'2:
(a) a payment on account of income tax under TMA 1970, s 59A (see E1.251)
(b) a payment of income tax by or on behalf of an individual for a year of assessment
(c) any of the following penalties incurred by an individual: a late filing penalty under A4.558, a deliberate withholding of information penalty under A4.559 and a late payment penalty under A4.566A
(d) (until the penalties in (c) come into force) a late payment penalty in respect of any of items 1, 12, 18 and 19 in the table at A4.561 or insofar as the tax falls within items 1, 17, 23 or 24
(e) a penalty incurred by an individual under any of the provisions of FA 2009, and
(f) a payment of capital gains tax3
Interest on repayments of income and capital gains tax is not taxable.
A repayment under head (b) above includes a repayment of tax deducted at source, including tax under PAYE.
The amount of the interest is equal to interest on the amount repaid from the relevant date to the date of issue of the repayment order at rates determined by a formula under regulations made in accordance with FA 1989, s 178 (see below).
Repayment interest start date
Where the repayment is under heads (a)–(f)
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