CCM10470 - Penalties and Interest: Interest on overpaid credits – Instalment offers

If you are inviting a letter of offer, which will be paid by instalments, you need to calculate both forward interest and statutory interest. Forward interest is not statutory interest but is a measure of compensation for HMRC having to wait longer for its money. Forward interest should be calculated in accordance with the guidance in CCM8450. In addition you will have to consider the statutory interest. See CCM10450.

If interest is to be included in a letter of offer you will need to refer to it in the letter of offer. The template for the letter of offer provides these words as optional text.