NIM07510 - Class 1 NICs: Interest: Finance Act 2009

The Finance Act 2009, Sections 101 and 102 (Interest on Late Payments and Repayments), Appointed Days and Consequential Provisions Order 2014 (SI 2014 No 992 (C. 45))

This order appointed the 6 May 2014 as the day from which:

• section 101 of the Finance Act 2009 (late payment interest on sums due to HMRC)
• section 102 of the Finance Act 2009 (repayment interest on sums to be paid by HMRC)

came into force for the purpose of:

• any Class 1 contributions amount payable by an employer to HMRC which is due and payable for the tax year 2014 to 2015 or for any subsequent tax year; and
• any Class 1 contributions amount which fall to be repaid by HMRC to an employer which was paid to HMRC for the tax year 2014 to 2015 or any subsequent tax year.

Under the new rules, HMRC will calculate interest and repayment interest in-year rather than annually after the end of the tax year - this means that instead of calculating interest and repayment interest from 19/22 April following the end of the tax year, HMRC will calculate interest from 14/17 days after the end of each tax month or quarter.

However, where a Real Time Information (RTI) employer corrects a mistake on a later return (i.e. Full Payment Submission (FPS) or Earlier Year Update (EYU)), late payment and late repayment interest is calculated as explained at NIM07525.