VDIM7100 - When to inhibit, amend or withdraw interest: Departmental delay

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.

Interest should not be inhibited because of Departmental delay because it will result in no interest being charged at all.

However the calculation date should be set correctly, see VDIM5050, to avoid an overcharge of interest due to departmental delay. If you do not do this and the taxpayer is overcharged interest as a result, corrective action will be needed using the VAT663 procedures, see VDIM6000.

It can be difficult to interpret Departmental delay but the following factors should be taken into account

• time taken by local office to process a form
• procedures involved before processing
• did the taxpayer fully comply and provide the full details at the right time.