TaxPersonal TaxTaxman defends IHT interest rate hike

Taxman defends IHT interest rate hike

HMRC hits back at claims changes to IHT interest rates were not consulted on and are unfair

 

The taxman has hit back at criticism over introducing an interest charge for
late payment on inheritance tax, saying it is a simpler and ‘fairer’ system for
taxpayers.

Following
reports
over the weekend claiming that
HM Revenue
& Customs
was introducing a 3% IHT interest charge without
warning and would recoup as much as £10m in charges from its introduction, the
taxman has fought back to defned its policy.

Rates charged on late tax payments would be ‘streamlined’: ‘This has been
subject to extensive consultation over the last 18 months and has been largely
welcomed by customer groups and their representatives.’
Payments to taxpayers would stand at 1% below the base interest rate, with a
floor of 0.5%.

‘The alignment of rates that will take place in September will mean that all
tax paid late is subject to interest at the same rate, so ensuring all taxpayers
are treated equally.

And in the interest of fairness we will also be introducing a repayment
interest floor, to ensure that any taxpayer overpaying tax will receive
interest.’

IHT receipts peaked for the taxman in 2006/2007, at £3.5bn, but is expected
to drop to £2.2bn in 2009/2010.

Further reading:

Current
IHT interest rates

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