Is Interest Due

Is Interest Due

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A client had losses for 2004/05 (his first year ) and loss relief was claimed under s381 ICTA 1988 against PAYE earnings in 2001/02. The repayment has been made but no interest has been added. Is interst payable on such as claim and if so from what date should it have been calculated?
Chris Mellon

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By User deleted
10th Nov 2005 18:39

There used to be interest, but not anymore
I agree with Andrew's reply outlining the current rules.

Before Self Assessment there would have been several years' repayment supplement (interest) and this was an important factor when deciding which sort of loss relief to claim those many years ago.

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By andymeeson
10th Nov 2005 12:38

No interest due
Claims for loss relief involving more than one tax year are treated as relating to the latter year (TMA 1970 Sch 1B para 2(2). The tax is calculated by reference to the earlier year's income, but the tax repaid is tax of the later year. Interest runs from the reckonable date for the later year.

In your client's case, the reckonable date for interest is the due date for 2004/05 tax, i.e. 31/1/2006, so no interest due.

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