Self-assessment overpayers lose out
Taxpayers that overpay the Inland Revenue will receive the lowest return on their money since self-assessment was introduced six years ago, after new interest rates were announced.
Link: SMEs face self assessment deadline
With the second self-assessment deadline for small businesses falling this week, the Revenue has cut the rate on overpaid tax to just 1.75%, shaving three-quarters of a point off the previous rate.
At the same time, the interest charges on late payments remains significantly higher at 5.5% although it has come down from 6.5%
Both new rates take effect from the 6 August. Not surprisingly the Revenue has come under fire for the massive difference in the two rates and has been accused of reducing the incentive for taxpayers to file on time.
But the Revenue claims the rate on unpaid tax is designed to discourage late payment and compensate the Exchequer for loss of taxes paid late, The Times reported.
Four millions taxpayers are expected to make their second payment on account by 31 July or risk surcharges and interest payments.