COM82030 - Interest: interest objections and amendments: considering an interest objection


For a CT Pay and File AP or CTSA AP late payment interest is charged under Section 87A TMA 1970 on all mainstream CT paid late

  • From the normal due date (Word 49KB)
  • To the effective date of payment (EDP (Word 41KB)), the date on which the payment (Word 26KB) is regarded as received by HMRC

For a CTSA AP debit interest (Word 31KB) is charged under Section 87A TMA 1970 (as extended by Regulation 7 of the Corporation Tax (Instalment Payments) Regulations 1988 (SI 1988 No. 3172)) on a Quarterly Instalment Payment (Word 42KB) paid late

  • From the instalment due date (Word 42KB)
  • To the effective date of payment (EDP), the date on which the payment is regarded as received by HMRC or to the normal due date, if that is earlier than the EDP

Notes:

1.

Interest is not charged on penalties and interest itself

2.

The normal due date is a non-interest bearing date, therefore late payment interest is calculated from the following day

3.

Each instalment due date is a non-interest bearing date for that instalment. Interest on each instalment therefore begins the following day

4.

A payment is not deemed to be paid until midnight of the day it is posted. This means that

 
  • Late payment and debit interest is calculated to this date inclusive

 
And

 
  • Credit interest is not calculated on that amount until the following day

The computer automatically reviews the late payment interest position when a payment or charge (Word 28KB) is recorded.

The computer does not automatically calculate and charge late payment interest where

  • The Clerical Interest Indicator CII (Word 32KB) is set to ‘Y’
Or
  • There is a ‘Date Struck Off’ on the record and that date has passed

Late payment interest continues to accrue throughout recovery proceedings.

The computer automatically calculates credit / debit interest when the due date has passed and a Self Assessment has been recorded.

The computer does not automatically calculate and charge credit / debit interest where

Or
  • There is a ‘Date Struck Off’ on record and this date has passed

For further information on how credit / debit and late payment interest is calculated see section ‘How Interest is Calculated’ (COM80000) in the business area ‘Interest’

The basic rule when considering an objection to interest charged under Section 87A is 

  • Late payment interest is always charged from the normal due date on all unpaid amounts
  • Debit interest is always charged from the quarterly instalment due dates on payments made late

The following have no effect on the normal due date or the quarterly instalment due dates, because they are fixed relative to the AP start and end dates

  • Whether the notice to deliver (Word 29KB) was delivered late or not at all
  • Whether the return has been submitted or not
  • The date the underlying tax was raised by capture of the return
  • The date a Revenue Determination (Word 29KB) or assessment was made
  • Any appeal against an assessment or amendment
  • The time taken by HMRC to deal with enquiries

Additionally, any reason given by the objector for late payment does not affect the interest charge.

In a proceedings case, however, an interest charge may need amending because, for example

  • Further liability later becomes payable
Or
  • The tax is reduced

The interest will need to be recalculated to ensure that the new interest charge is correct.

Note: Where further liability arises on a previously cleared enforcement case, the Pursuit Status LA-ENF (Word 27KB) is automatically reinstated.

For more information see section ‘How Interest is Calculated’ (COM80000) in this business area.

For a list of forms relevant to this subject, see COM82021.

For legislation applying to this subject, see COM82031. 

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