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A4.620 Interest on late payment of tax—overview

For the latest New Development, see ND.2560 and ND.2740.

TMA 1970, s 86 provides for interest to be charged where payment of tax is delayed, although the application is being replaced, in stages, by provisions that are to be applied to all taxes and duties (see 'Harmonised interest regime' below).

Note that where the taxpayer has entered into a time to pay arrangement with HMRC before any first late payment penalty/surcharge date and all the payments due under that arrangement are made on time, interest will be charged on late payment of the tax debt, but the penalty/surcharge is not imposed. See A4.610.

HMRC does not have any general power to mitigate interest, as it has for penalties, but there are specific circumstances under which an interest charge may be reduced:

1. Ìý

   (a)ÌýÌýÌýÌý financial redress in the form of a waiver of statutory interest on unpaid tax may be considered in a complaint case (see A5.401), and

2. Ìý

   (b)ÌýÌýÌýÌý where tax is deferred in response to a disaster