Late payment interest rates to rise
An Inland Revenue interest rate hike on late tax payments by a whole percentage point has been described as 'profiteering' by accountants.
The taxman has increased the interest rate from 6.5% to 7.5% on overdue payments, yet the interest it pays to taxpayers who have overpaid tax remained unchanged at 3.5%, according to reports in the Daily Telegraph
‘Bear in mind there is also a 5pc surcharge added to tax bills that are paid late and so this 7.5pc supplement is money for nothing and looks like profiteering,’ said Chas Roy-Chowdhury, head of taxation at ACCA.
Mike Warburton, senior partner at Grant Thornton, said: ‘It is another stealth tax and wholly unreasonable.’
A Revenue spokesman defended the rates. ‘If the interest rate on unpaid tax is too low it may encourage people to treat the Inland Revenue as a source of cheap credit. Where somebody has overpaid, if the interest is too high it may encourage people to treat the Inland Revnue as a bank,’ he said.