LFT20040 - Interest: Interest payable by HMRC

Under paragraph 29 of the Finance Act 1996, Schedule 5, if we make an error which results in site operators paying too much tax, we are liable to pay them interest. They must apply in writing to us within four years of discovering the error. However any application for interest can not be for earlier than 01/04/2007

There are restrictions on our paying interest for the time taken by taxpayers to answer our queries. If the time was included there would be no incentive for the taxpayer to supply the information requested at the earliest opportunity.

Where we are liable to pay interest under paragraph 29 the amount of interest will be treated as a credit due to the registered person and follow the procedures for repayment in the regulations made under Section 51 of the Finance Act 1996.

The rate of interest is set by regulations made under Section 197 of the Finance Act 1996. The Departmental rates of interest are available on the HMRC website.