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HMRC concession reduces unfair interest charges

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Taxpayers can be charged interest and surcharges although they are due a tax repayment from HMRC. Jane Wanless explains how a little-known concession can be used to reduce such charges.

19th Nov 2021
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While clients rarely enjoy paying their tax liabilities, interest charges can be even less welcome, particularly when a repayment for a later year is offset against an earlier year’s liability.

This situation is likely now, as some businesses struggled through lockdowns in 2020, and so have claimed a trading loss on their 2020/21 tax return. Rather than pay tax still outstanding for 2019/20, the trader may prefer to offset an overpayment arising from the 2020/21 loss claim.

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Replies (3)

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By SteveHa
19th Nov 2021 13:06

Of course if HMRC were to get their fingers out, the Return could be submitted on 8 May, repayment issued on 9 May for the £3,000, and taxpayer makes payment on 12 May. 4 days interest and no concession needed.

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By Paul Crowley
19th Nov 2021 19:03

Someone needs to reprogramme the computer
Just like CT late filing penalties on a stretched accounting reference date

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By StarkSeahorse
23rd Nov 2021 08:37

Thank you for sharing article and information. this is very helpful for beginner.

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