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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.