PART 4PAYMENTS, RETURNS AND INFORMATION

CHAPTER 1PAYMENT OF TAX AND ASSOCIATED RETURNS

Interest

Interest on tax overdue82.

(1)

This regulation applies if an employer has not paid to F1HMRC the total net tax payable in respect of a tax year by the reckonable date.

(2)

Any unpaid tax carries interest at the prescribed rate from the reckonable date until payment (“the interest period”).

(3)

Paragraph (2) applies even if the reckonable date is a non-business day as defined by section 92 of the Bills of Exchange Act 188242.

(4)

But paragraph (2) does not apply to any tax which the employer does not have to pay as a result of a direction made under F2regulation 72(5), 72F or 81(4).

(5)

Any change made to the prescribed rate during the interest period applies to the unpaid tax from the date of the change.

(6)

The “total net tax payable” in respect of a tax year is—

(a)

the total of any amounts payable by the employer under regulation F367G F4, as adjusted by regulation 67H(2) where appropriate, or 68 for tax periods in the tax year, less

(b)

the total of any amounts recoverable from the Board of Inland Revenue under regulation F567G(3)(b) or 68(3)(b) for those tax periods.

(7)

The “prescribed rate” means the rate applicable under section 178 of the Finance Act 198943 for the purposes of section 86 of TMA.

(8)

F6Except where tax is due in respect of a closed tax year by virtue of a retrospective tax provision, the “reckonable date” means—

(a)

17 days after the end of the tax year, if payment is made using an approved method of electronic communications, or

(b)

14 days after the end of the tax year, in any other case.

F7(9)

Where tax is due in respect of a closed tax year by virtue of a retrospective tax provision, the “reckonable date” means 14 days after the end of the tax month following that in which the retrospective tax provision is passed.