Interest on late SA payment and CT payment

Interest on late SA payment and CT payment

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Hello,

I would like to know if the 5% interest on late SA payments is a yearly interest figure? For example, if I owe £10,000 and I am a month late, do I owe £500 or £41.66?

Also, I am unsure whether the interest is charged if I am 1 day late or only after 30 days?

Is late payment of Corp Tax at 3% a yearly interest figure or does this accumulate over time?

I would be very appreciative if someone could clear these issues up for me.

Thank You

Replies (3)

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By johngroganjga
17th Jan 2014 07:03

All interest calculations are done on a daily basis. The interest rates quoted are all per annum. Interest starts to run on the day after the due date for payment.

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By stephenkendrew
17th Jan 2014 08:04

Do you mean the surcharge?

There are potentially two different amounts that can be charged on late SA payments - 

Interest - this is calculated on a daily basis currently at an annual rate of 3%;Surcharge - this is a fixed 5% if the tax due on the 31 January after the end of the tax year is paid more than a month late (unless there's a time to pay arrangement)

So, if you owed tax for 2012/13 of £10,000 and didn't pay it until 1 March, you will be liable to both the surcharge of £500 and the interest of £41.66.

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By DP Walsh
17th Jan 2014 08:40

Thanks John and Stephen for your helpful and concise replies. You can never be sure with HMRC.

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