The question of interest payable in respect of the late payment of tax and NIC due under the PAYE procedures must be considered separately as regards:-
- late payment of the amounts due monthly or quarterly under Income Tax (Pay As You Earn) Regulations 2003, reg. 68; and
- tax payable under a reg. 80 determination.
Late Payment of Amounts due under Reg. 68
The Finance Act 1988, s. 128 amended ICTA 1988, s. 203(2) to enable the Board to make regulations to charge interest on late payments. The regulations (SI 1993/725) came into force on 6 April 1993 and interest on such late payments runs from 19 April after the end of the tax year to which they relate. This regulation is now Income Tax (Pay As You Earn) Regulations 2003, reg. 68.
Regulation 80 Determinations
Until the Income Tax (Employments) (No. 17) Regulations 1988, no interest was chargeable under TMA 1970, s. 86 in respect of tax due on a reg. 80 determination. For any determination made after that date relating to a year of assessment up to and including 1987–88, interest will run from 19 April 1988. Determinations for 1988–89 and later years will carry interest from 19 April following the end of the year of assessment to which the determination relates. Consequently, interest on a reg. 80 determination can run from a date prior to the making of the determination, but it should be noted that, even if the tax remains unpaid after 19 April 1988, no interest will be due in respect of tax charged in a reg. 80 determination made before that date.