HMRC interest and effective date of payment

HMRC interest and effective date of payment

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New sole trader client did not deduct CIS from monies paid to partnership he was also involved in. As such HMRC have arrived at amount payable for last 3 years and charged interest thereon.

Have since amended the partnership tax returns for CIS tax and credited to my client so that he has credit balance on his self-assessment statement of account to meet the baulk of the monies assessed by HMRC.

HMRC quite happy with this and the net effect is that the loss to my client is the interest charged by HMRC on overdue CIS tax less repayment supplement credited to his SA statement for pers tax credits.

However, my question is - can we request that the pers tax credits be directly offset against the CIS tax due so that the higher rate of interest charged by HMRC is minimised? Hope that makes some sort of sense to someone out there - had it in the back of my head that there was something that could be done in such instances.

Steve

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By thehaggis
04th Jun 2008 15:50

EDP

If I recall set-offs correctly, the date you ask for a set-off to be made will be treated as the date the arrears were paid. It will not have a significant effect on the interest charged.

I know that there are measures afoot for cross tax set-offs, but sorry, I don't know the detail or the implications for interest.

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