CH140260 | Interest: Simple interest, not compound

You must check whether, and from which date, the FA 2009 interest rules apply to the tax or duty you are dealing with. See CH140160 for full details.

Late payment interest and repayment interest are simple interest, not compound interest. Payments of interest do not themselves attract interest under FA 2009, so

• late payment interest does not apply to any late payment interest already charged, and

• repayment interest does not apply to any repayment interest already accrued.

For example, if late payment interest is due on £100 of tax for a period of 12 months, we multiply £100 by the annual rate of interest. We do not charge interest each month on the interest already accrued.

FA09/S101(8)

FA09/S102(7)