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Interest on late paid tax

Produced by Tolley in association with
Owner-Managed Businesses
Guidance

Interest on late paid tax

Produced by Tolley in association with
Owner-Managed Businesses
Guidance
imgtext

Introduction

Interest on late paid tax is a compulsory charge set out in legislation to reflect the interest which would have accrued to the Exchequer had the correct amount of tax been paid at the right time.

Harmonised legislation was introduced in 2009 to:

  1. •

    set statutory calculations of interest for late payment of tax and repayment of tax that would apply to all taxes, and

  2. •

    standardise the rules in relation to the period over which the interest applies and the amounts subject to interest

Although the rules were eventually meant to apply to all taxes, the appointed day from which the rules were applied was staggered. For some taxes, the harmonised rules were never introduced.

It is now the case that the standardised rate of interest for late payment of tax and repayment of tax applies to all taxes. Any taxes that were not within these rules were so brought in by FA 2019, s 88.

As such, the interest rates given on the GOV.UK website apply to all the direct

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Philip Rutherford
Philip Rutherford

Senior Tax Director at Molson Coors Brewing Company


Phil is the Senior Tax Director for Molson Coors' European operations. He has responsibility for both direct and indirect taxes across both EU and non-EU states. Prior to this, Phil was responsible for Molson Coors UK tax affairs covering all major taxes and duties.   Phil trained at KPMG LLP, where he worked for 8 years, specialising in tax investigations across both direct and indirect tax.

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