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EM6010 | Contract Settlements: Interest: Calculation for Pre-SA Years

From HM Revenue & Customs · Enquiry Manual

The guidance about contract settlements at EM6000+ only relates to direct tax. You must never include VAT or VAT penalties in a contract settlement.

The interest regime for pre-SA years depends on whether or not the assessment was made prior to 6 April 1998.

For assessments up to 1995/96 made on or after 6 April 1998 interest is chargeable from 31 January following the end of the tax year - FA 95/S110(2). Thus a 1992/93 assessment made in 2001 would carry interest from 31 January 1994. EM4015

Where there are assessments made before 6 April 1998 for 1995/96 or an earlier year, or an assessment on an ‘old’ partnership for 1996/97 made at any time, then either TMA70/S86 (pre SA) or TMA70/S88 will apply. For detailed guidance refer to EM4015.