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Penalty on late payment of interest (SA)?

Convoluted logic of multiple mixed 'deadlines'

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Usually the deadline for filing a return and paying any due tax are one and the same thing ... but the recent Covid-19 variations could lead to the following situation:

* Client files return with HMRC on/before 28th Feb - with result that no late filing penalty is due.

* Client sends payment to HMRC at any time on/before 1st April - so no late payment penalty should be due.

* However interest has been applied on the tax due from 1st Feb onwards - thereby increasing the amount payable.

* Tax-payer is either unaware of this or fails to calculate interest accurately, so has not actually made full payment to HMRC - and therefore late payment penalty is levied?

Hopefully I've misunderstood something fundamental here ... if so, could someone enlighten me please?

Replies (4)

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By Duggimon
23rd Feb 2021 13:52

There's no penalty for late payment of interest, only for late payment of tax.

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By gainsborough
23rd Feb 2021 13:54

Yup, FA2009 schedule 56 table

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By Paul Crowley
23rd Feb 2021 14:05

Agree all
That is also why HMRC set all payments against tax, even if there is old penalty and interest floating around

Clients best interest allocation

Thanks (1)
By Hugo Fair
23rd Feb 2021 15:07

Many thanks to one and all.
I knew that penalties couldn't be applied on late payment of penalties (although who knows what circular lunacy may be introduced downstream)!
What I was less clear on (due to the sloppy wording in all the missives I keep receiving from different units within HMRC) was whether interest was accounted for as a separate 'due item' or was lumped in with 'tax due' ... the latter being my interpretation of some of the communications.
It's great to know that common sense and the regs are coincident (for a change)!

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