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Updates: VAT Default Interest Manual

2025

2023

23 January 2023 published amendments

Introduction: contents

First paragraph amended

Introduction: Who is this guidance for

First paragraph amended

Introduction: What is default interest

First paragraph amended

Introduction: Where to go for advice

First paragraph amended

The law and legal powers: The law supporting default interest

First paragraph amended

The law and legal powers: Establishing liability to interest

First paragraph amended

The law and legal powers: Reckonable dates

First paragraph amended

The law and legal powers: 3 year limit of interest

First paragraph amended

The law and legal powers: Discretion to assess interest or not

First paragraph amended

The law and legal powers: Time limits for assessing interest

First paragraph amended

The law and legal powers: The 2 year time limit to assess further interest

First paragraph amended

Commercial restitution: General principles

First paragraph amended

Commercial restitution: Whether to charge interest or not

First paragraph amended

Commercial restitution: Assessments which represent commercial restitution in part

First paragraph amended

Commercial restitution: Assessments in respect of exports and removals to other EU countries

First paragraph amended

Commercial restitution: Differences in stagger or return length between taxpayers

First paragraph amended

Calculating Liability: Confirming the liability

First paragraph amended

Calculating liability: Amount liable to interest

First paragraph amended

Calculating liability: Over declarations

First paragraph amended

Calculating liability: Recovery assessments

First paragraph amended

Calculation of interest: contents

First paragraph amended

Calculation of interest: Rates of interest

First paragraph amended

Calculation of interest: The interest span

First paragraph amended

Calculation of interest: The reckonable date

First paragraph amended

Calculation of interest: The end date

First paragraph amended

Calculation of interest: Setting the calculation date

First paragraph amended

Calculation of interest: The issue date

First paragraph amended

Calculation of interest: The interest calculation formula

First paragraph amended

Calculation of interest: Further interest

First paragraph amended

Calculation of interest: De minimis limit

First paragraph amended

Calculation of interest: Interest Calculation Record

First paragraph amended

Calculation of interest: How to access and read an Interest Calculation Record (ICR)

First paragraph amended

Calculation of interest: Interest calculation record codes

First paragraph amended

Calculation of interest: Interest bearing tax payments

First paragraph amended

Calculation of interest: Overview of interest procedures

First paragraph amended

Interest adjustments: contents

First paragraph amended

Interest adjustments: Functions of Form VAT663

First paragraph amended

Interest adjustments: When to use Form VAT663

First paragraph amended

Interest adjustments: Completion of Form VAT663

First paragraph amended

Interest adjustments: Countersigning Form VAT663

First paragraph amended

Interest adjustment: Processing Form VAT663

First paragraph amended

Interest adjustment: After input of Form VAT663

First paragraph amended

Interest adjustment: VISION option to calculate interest

First paragraph amended

When to inhibit, amend or withdraw interest: content

First paragraph amended

When to inhibit, amend or withdraw interest: discretion to inhibit interest

First paragraph amended

When to inhibit, amend or withdraw interest: Commercial restitution

First paragraph amended

When to inhibit, amend or withdraw interest: Appeals

First paragraph amended

When to inhibit, amend or withdraw interest: Computer distortions

First paragraph amended

When to inhibit, amend or withdraw interest: Misappropriation of remittances

First paragraph amended

When to inhibit, amend or withdraw interest: Complicated retrospective agreements

First paragraph amended

When to inhibit, amend or withdraw interest: Actual issue date is after issue date on VISION

First paragraph amended

When to inhibit, amend or withdraw interest: Postal delays

First paragraph amended

When to inhibit, amend or withdraw interest: VAT returns provided at visit

First paragraph amended

When to inhibit, amend or withdraw interest: Departmental delay

First paragraph amended

When to inhibit, amend or withdraw interest: The two year time limit

First paragraph amended

When to inhibit, amend or withdraw interest: Bulk assessments

First paragraph amended

When to inhibit, amend or withdraw interest: VAT assessments involving suspected fraud

First paragraph amended

When to inhibit, amend or withdraw interest: When interest is not appropriate

First paragraph amended

How to inhibit, amend or withdraw interest: contents

First paragraph amended

How to inhibit, amend or withdraw interest: Introduction

First paragraph amended

How to inhibit, amend or withdraw interest, Amending interest following misappropriation of a remittance

First paragraph amended

How to inhibit, amend or withdraw interest: Inhibiting or withdrawing interest on an assessment

First paragraph amended

How to inhibit, amend or withdraw interest: Setting an inhibit after an assessment is processed

First paragraph amended

How to inhibit, amend or withdraw interest: Amending interest after an assessment has been processed

First paragraph amended

Circumstances affecting default interest: contents

First paragraph amended

Circumstances affecting default interest: Transfer of a going concern

First paragraph amended

Circumstances affecting default interest: Deregistration

First paragraph amended

Circumstances affecting default interest: Insolvency

First paragraph amended

Circumstances affecting default interest: Informal insolvency

First paragraph amended

Circumstances affecting default interest: Redundant registrations

First paragraph amended

Circumstances affecting default interest: Manual calculation of interest

First paragraph amended

Circumstances affecting default interest: Withdrawing or reducing interest

First paragraph amended

Circumstances affecting default interest: Pre-repayment credibility queries

First paragraph amended

Circumstances affecting default interest: Bulk period assessments

First paragraph amended

Circumstances affecting default interest: Long first period returns

First paragraph amended

Notices: Notifying the taxpayer

First paragraph amended

Notices: Notices of further interest - use of VAT658

First paragraph amended

Notices: Notice of further interest - use of VAT659

First paragraph amended

Management information prints: Note for managers

First paragraph amended

Management information prints: D1686 Change of interest notification

First paragraph amended

Management information prints: D1688 Notification of officers assessments issued

First paragraph amended

Reviews and appeals: What in law may be appealed

First paragraph amended

Review and appeals procedures

First paragraph amended

Review and appeals: Suspending interest under appeal

First paragraph amended

Reviews and appeals: Reasons why a taxpayer might appeal

First paragraph amended

Reviews and appeals: Use of the VAT647 to lift the appeals indicator.

First paragraph amended

Reviews and appeals: interest following HMRC's success at tribunal

First paragraph amended

2022

19 December 2022 published amendments

Introduction: contents

New text added to the page

Introduction: Who is this guidance for

Two new paragraphs added at the top of the page

Introduction: What is default interest

Two new paragraphs added at the top of the page

Introduction: Where to go for advice

Two new paragraphs added at the top of the page

The law and legal powers: The law supporting default interest

Two new paragraphs added at the top of the page

The law and legal powers: Establishing liability to interest

Two new paragraphs added at the top of the page

The law and legal powers: Reckonable dates

Two new paragraphs added at the top of the page

The law and legal powers: 3 year limit of interest

Two new paragraphs added at the top fo the page

The law and legal powers: Discretion to assess interest or not

Two new paragraphs added at the top of the page

The law and legal powers: Time limits for assessing interest

Two new paragraphs added at the top of the page

The law and legal powers: The 2 year time limit to assess further interest

Two new paragraphs added at the top of the page

Commercial restitution: General principles

Two new paragraphs added at the top of the page

Commercial restitution: Whether to charge interest or not

Two new paragraphs added at the top of the page

Commercial restitution: Assessments which represent commercial restitution in part

Two new paragraphs added at the top of the page

Commercial restitution: Assessments in respect of exports and removals to other EU countries

Two new paragraphs added at the top of the page

Commercial restitution: Differences in stagger or return length between taxpayers

Two new paragraphs added at the top of the page

Calculating Liability: Confirming the liability

Two new paragraphs added at the top of the page

Calculating liability: Amount liable to interest

Two new paragraphs added at the top of the page

Calculating liability: Over declarations

Two new paragraphs added at the top of the page

Calculating liability: Recovery assessments

Two new paragraphs added at the top of the page

Calculation of interest: contents

New text added to the page

Calculation of interest: Rates of interest

Two new paragraphs added at the top of the page

Calculation of interest: The interest span

Two new paragraphs added at the top of the page

Calculation of interest: The reckonable date

Two new paragraphs added at the top of the page

Calculation of interest: The end date

Two new paragraphs added at the top of the page

Calculation of interest: Setting the calculation date

Two new paragraphs added at the top of the page

Calculation of interest: The issue date

Two new paragraphs added at the top of the page

Calculation of interest: The interest calculation formula

Two new paragraphs added at the top of the page

Calculation of interest: Further interest

Two new paragraphs added at the top of the page

Calculation of interest: De minimis limit

Two new paragraphs added at the top of the page

Calculation of interest: Interest Calculation Record

Two new paragraphs added at the top of the page

Calculation of interest: How to access and read an Interest Calculation Record (ICR)

Two new paragraphs added at the top of the page

Calculation of interest: Interest calculation record codes

Two new paragraphs added at the top of the page

Calculation of interest: Interest bearing tax payments

Two new paragraphs added at the top of the page

Calculation of interest: Overview of interest procedures

Two new paragraphs added at the top of the page

Interest adjustments: contents

New text added to the page

Interest adjustments: Functions of Form VAT663

Two new paragraphs added at the top of the page

Interest adjustments: When to use Form VAT663

Two new paragraphs added at the top of the page

Interest adjustments: Completion of Form VAT663

Two new paragraphs added at the top of the page

Interest adjustments: Countersigning Form VAT663

Two new paragraphs added at the top of the page

Interest adjustment: Processing Form VAT663

Two new paragraphs added at the top of the page

Interest adjustment: After input of Form VAT663

Two new paragraphs added at the top of the page

Interest adjustment: VISION option to calculate interest

Two new paragraphs added at the top of the page

When to inhibit, amend or withdraw interest: content

New text added to the page

When to inhibit, amend or withdraw interest: discretion to inhibit interest

Two new paragraphs added at the top of the page

When to inhibit, amend or withdraw interest: Commercial restitution

Two new praagraphs added at the top of the page

When to inhibit, amend or withdraw interest: Appeals

Two new paragraphs added at the top of the page

When to inhibit, amend or withdraw interest: Computer distortions

Two new paragraphs added at the top of the page

When to inhibit, amend or withdraw interest: Misappropriation of remittances

Two new paragraphs added at the top of the page

When to inhibit, amend or withdraw interest: Complicated retrospective agreements

Two new paragraphs added at the top of the page

When to inhibit, amend or withdraw interest: Actual issue date is after issue date on VISION

Two new paragraphs added at the top of the page

When to inhibit, amend or withdraw interest: Postal delays

Two new paragraphs added at the top of the page

When to inhibit, amend or withdraw interest: VAT returns provided at visit

Two new paragraphs added at the top of the page

When to inhibit, amend or withdraw interest: Departmental delay

Two new paragraphs added at the top of the page

When to inhibit, amend or withdraw interest: The two year time limit

Two new paragraphs added at the top of the page

When to inhibit, amend or withdraw interest: Bulk assessments

Two new paragraphs added at the top of the page

When to inhibit, amend or withdraw interest: VAT assessments involving suspected fraud

Two new paragraphs added at the top of the page

When to inhibit, amend or withdraw interest: When interest is not appropriate

Two new paragraphs added at the top of the page

How to inhibit, amend or withdraw interest: contents

New text added to the page

How to inhibit, amend or withdraw interest: Introduction

Two new paragraphs added at the top of the page

How to inhibit, amend or withdraw interest, Amending interest following misappropriation of a remittance

Two new paragraphs added at the top of the page

How to inhibit, amend or withdraw interest: Inhibiting or withdrawing interest on an assessment

Two new paragraphs added at the top of the page

How to inhibit, amend or withdraw interest: Setting an inhibit after an assessment is processed

Two new paragraphs added at the top of the page

How to inhibit, amend or withdraw interest: Amending interest after an assessment has been processed

Two new paragraphs added at the top of the page

Circumstances affecting default interest: contents

New text added to the page

Circumstances affecting default interest: Transfer of a going concern

Two new paragraphs added at the top of the page

Circumstances affecting default interest: Deregistration

Two new paragraphs added at the top of the page

Circumstances affecting default interest: Insolvency

Two new paragraphs added at the top of the page

Circumstances affecting default interest: Informal insolvency

Two new paragraphs added at the top of the page

Circumstances affecting default interest: Redundant registrations

Two new paragraphs added at the top of the page

Circumstances affecting default interest: Manual calculation of interest

Two new paragraphs added at the top of the page

Circumstances affecting default interest: Withdrawing or reducing interest

Two new paragraphs added at the top of the page

Circumstances affecting default interest: Pre-repayment credibility queries

Two new paragraphs added at the top of the page

Circumstances affecting default interest: Bulk period assessments

Two new paragraphs added at the top of the page

Circumstances affecting default interest: Long first period returns

Two new paragraphs added at the top of the page

Notices: Notifying the taxpayer

Two new paragraphs added at the top of the page

Notices: Notices of further interest - use of VAT658

Two new paragraphs added at the top of the page

Notices: Notice of further interest - use of VAT659

Two new paragraphs added at the top of the page

Management information prints: Note for managers

Two new paragraphs added at the top of the page

Management information prints: D1686 Change of interest notification

Two new paragraphs added at the top of the page

Management information prints: D1688 Notification of officers assessments issued

Two new paragraphs added at the top of the page

Reviews and appeals: What in law may be appealed

Two new paragraphs added at the top of the page

Review and appeals procedures

Two new paragrphs added at the top of the page

Review and appeals: Suspending interest under appeal

Two new paragraphs added at the top of the page

Reviews and appeals: Reasons why a taxpayer might appeal

Two new paragraphs added at the top of the page

Reviews and appeals: Use of the VAT647 to lift the appeals indicator.

Two new paragraphs added at the top of the page

Reviews and appeals: interest following HMRC's success at tribunal

Two new paragraphs added at the top of the page

2021

25 February 2021 published amendments

Calculation of interest: The interest calculation formula

Spelling error corrected

2020

27 October 2020 published amendments

Calculating liability: Over declarations

First paragraph amended

Introduction: Where to go for advice

Guidance entirely amended

Minor reformatting

Minor reformatting

2019

2018

14 December 2018 published amendments

The law and legal powers: The 2 year time limit to assess further interest

Amendments made throughout the page

Circumstances affecting default interest: Pre-repayment credibility queries

Guidance entirely re-written

2017

21 February 2017 published amendments

Commercial restitution: General principles

Final bullet point amended

27 January 2017 published amendments

Interest adjustment: Processing Form VAT663

Address amended and final sentence amended to '451INDEX'

2016

4 October 2016 published amendments

Circumstances affecting default interest: contents

New page VDIM9025 added to the contents page