TFC55500 - Assessment and enforcement of recoverable top-up payments: interest charges

Charging Interest

Childcare Payments Act 2014, section 51(1)

HMRC may charge a person interest on unpaid penalties and recoverable top-up payments assessed under section 41 or 47 of the Act if they have not paid all of the sum due by the due date. If it does so, HMRC must notify the person in writing that interest has been charged on the outstanding amount.

Childcare Payments Act 2014, section 51(2)

If HMRC notifies a person that interest will be charged on the outstanding amount, the debt carries interest for a period beginning with the late payment interest start date (which may be earlier than the day on which the notice is given), and ends with the specified day or, if earlier, the day on which the relevant debt is paid.

Start date of interest charge

Childcare Payments Act 2014, section 51(3)

For amounts assessed under section 41 of the Act, the late payment interest start date means the day on which the person becomes liable under sections 35 to 40 of the Act to pay those amounts. In the case of penalties assessed under section 47 of the Act, it will be the day on which the debt becomes overdue.

If the debt has not been paid by the date specified in the notice, HMRC may issue a further notice which specifies a different, later, end date. This enables HMRC to extend the period for which interest is charged when a debt remains unpaid.

End date of Interest charge

Childcare Payments Act 2014, section 51(4) and (5)

The end date for the interest is any specified day within 6 months of the date on which a notice is issued under this section.

Rates of interest to be charged

Childcare Payments Act 2014, section 51(6) and (7)

Interest charged under this section is payable at the same rate which applies to late payments of tax (set out in section 103(1) of Finance Act 2009). This rate is currently set at 3%.

Joint liability to pay interest

Childcare Payments Act 2014, section 51(8)

If two or more people have been notified that they are liable to pay interest on a debt, that interest can be enforced against them either individually or together