ECH22032 - Settlement: Interest
Interest should only be included in Employer Compliance
settlements for 1992/93 and later years, see
ECH12075 on when to charge interest.
ECOs should remember that
- interest is a statutory charge and, as such, cannot be negotiated
- interest is not a penalty it is
- intended to recompense the Exchequer where payment is delayed and
- a means of maintaining equity between those employers who pay on time and those who do not.
The Regulations covering interest are
For PAYE
- Regulations 82 and 84 The Income Tax (Pay As You Earn ) Regulations 2003
For CIS and IT-SC
- Regulations 16 and 17, The Income Tax (Subcontractors in the Construction Industry) Regulations 1993.
For Class 1 NIC
- Paragraph 17 Schedule 4 of The Social Security (Contributions) Regulations 2001.
For Class 1A NIC
- Regulation 76 of the Social Security (Contributions) Regulations 2001.
The following types of cases or schemes are exempt from interest
- DP cases
- DC (employee only NIC) cases
- payments to some casual employees in the newspaper and printing industries
- profit sharing schemes
- electoral payment schemes
- Taxed Award schemes
