CH146410 | Interest: repayment interest: special provisions for VAT: payments on account

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.

All VAT registered businesses with an annual VAT liability of more than £2.3m are required to make payments on account at the end of the second and third months of each VAT accounting period and a balancing payment for the quarter.

The due dates for payments on account are the last working day of the second and third months of every VAT quarterly accounting period. The balancing payment due with their VAT return must clear to HMRC’s bank account by the last working day of the month following the end of the accounting period – see VPOA guidance for more information about payments on account.

Where VAT payments on accounts exceed the VAT payable in respect of the prescribed accounting period a special provision changes the repayment interest start date from the general rule. The repayment interest start date is the date on which the VAT return for the prescribed accounting period is due (and not the date the relevant POA was paid/due).

See example at CH146420

Note: This special provision is for repayment interest only. There is no special provision which changes the late payment interest start date. Late payment interest applies to each individual payment on account and the balancing payment and is charged on any amount which is not paid by the relevant due date – see CH140290.

FA09/SCH54/PARA12C