TaxPersonal TaxHMRC charges itself 0% interest on overpayments

HMRC charges itself 0% interest on overpayments

Taxman won't face any interest on money overpaid by taxpayers

The taxman is set to cut its interest rate for people who have overpaid tax
to 0%.

HM Revenue
& Customs
will not incur any interest cost on the money it owes
people who have overpaid tax, despite charging an interest rate for those who
owe the taxman.

‘HMRC has always encouraged people to pay their taxes by charging a
relatively high rate of interest on unpaid tax. When it’s the other way round,
with HMRC owing money to individuals and businesses, the interest rate is always
lower. It is called the “repayment supplement”, but now there is no repayment
and no incentive to ensure repayments are fast,’ Baker Tilly head of tax George
Bull told the Observer.

McGrigors partner Rupert Shiers believes the 0% rate might contravene
European law, which requires a competitive rate of interest on overpayments.

Further reading:

View
the rates here

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