VDIM7040 - When to inhibit, amend or withdraw interest: Computer distortions

This guidance deals with interest matters in respect of prescribed accounting periods starting on or before 31 December 2022. Interest matters with effect from 01 January 2023 are dealt with under Finance Act 2009.

Please see Compliance Handbook page CH140000 onwards to find the new interest rules guidance.

Because of the limitations of the computer mainframe, the interest charge may be considered to be excessive, for example, following an under declaration assessment an over declaration has been accepted for the same period, see VDIM4040.

The computer does not make any allowances in the interest process for the extended due date for mandatory on line filing. As a result interest may be overcharged because it will be calculated from an earlier due date. Similar corrective action should be taken as if an assessment under s 73(2) VAT Act was issued see VDIM4040. An adjustment to reduce the interest span will be needed using the VAT663 procedures as in VDIM6000.