HMRC interest payment

shoudl i try and tell HMRC to poke it.

let us know how that one works out for you...

unless of course you are representing SUI megacorp and have the tax lawyers firepower to tell HRMC to poke it....

Pay it and then by all means poke the bear, but just pay it first or you'll only end up owing them even more money

ill go for z1ppy's option - there is no megacorp behind me on this one.  HMRC are just like the local council - bunch of bully's

I'll ask my missus later, I think she's been through this one with a client.

I wouldn't say it's bullying as opposed to just the consequences of chronic under staffing.

If you log on to your government gateway account you can see live info about what you owe and the interest payments. There really isn't an excuse anymore - as I realised when I neglected to pay enough NI from my limited company.

#whoops

 From what i can see, they increased interest rates half way through the year, but surely they were fixed?

Did it expressly state that the interest rate was fixed?  I don't think HMRC do fixed interest.

The only way I know to get compensation out of HMRC for a mistake they have made is to put in an official complaint and mention the emotional distress it has caused. 4-6 weeks later we got a letter back saying they don’t pay compensation but as it has caused distress here’s £150. It's something I read when researching the complaints process.

They were chasing about £4K we didn’t owe and system A showed the right amount but system B didn’t (the one used for debt collection) and nobody at HMRC could see the whole picture. Went on for about 6 months so the distress was real.

pay it and then complain, its takes them 9-18 months to reply to a letter, so interest will mount..

let us know how that one works out for you…

A few years ago I got a big redundancy payment. I immediately called HMRC to make sure the tax deducted was correct. They told me it was wrong and I'd overpaid by £10k and they sent me a cheque

About 2 years later they get in touch to tell me they were wrong and I had to give the £10k back

I appealed it under one of their rules, can't remember exactly which, but I felt it was a rock solid appeal. 

They denied it on the basis that it was my responsibility to check my tax was correct, and I hadn't done that, so tough shit. When I pointed out that I had specifically called them to make sure the tax was correct, apparently that wasn't me checking it was correct. I should have checked again once I'd been given the rebate.

An absolutely awful organisation.

I had a similar situation... received a big cheque for years of supposed over payment of NI. I knew they were wrong and kept TRYING to convince them they were wrong so I could pay it back. Money sat in my account while they kept refusing their mistake. I gave up after six months of trying. Then, 2 years later... they woke up and said they'd got it wrong, and I had to repay. Fine... I repaid the next day with the money I kept aside. Then I got charged interest... on money I had "owed" them for two years that they had previously tried to persuade me was mine... after much to and fro I gave up and paid the interest.

Short version... just pay it, don't try and make a point... no one will listen or give a shit. It doesn't matter if it was their mistake... if they say interest is owed you just have to pay it.

Yup, as above.  I was part of that contractor loan ordeal, was a big number but not big enough to lose sleep over so as soon as they started getting heavy I paid and never looked back.  Wiped me out mind you but moral of the story: house always wins

right im paying now after thos horror stories...

Yeah, feel free to challenge it AFTER paying, but nothing to gain from holding out on the payment while you try to argue your case.

so interest will mount..

wasnt there a thing a few years back where HRMC were paying above market rates on overpayments, so people were using them as a savings account...

I immediately called HMRC to make sure the tax deducted was correct.

There's your error, always write and get confirmation in writing. Word of mouth is not worth anything.

There’s your error, always write and get confirmation in writing. Word of mouth is not worth anything.

Oh they had a recording of the call which they referred to during my appeal. They apologised for the person on the phone making the mistake, but apparently it was my mistake for not checking their calculations.

Pay up, move on.
That's also the advice of my accountant.

"No thank you, dear, I'm not interested in another payment..."

They apologised for the person on the phone making the mistake

There is a term of "official error" that could probably be applied to this situation. Probably too late for your case but may be useful for future actions.

get confirmation in writing

Good luck with that.

I had plenty in writing. But their error still means you pay. Having a written record of their error means nothing. What are you going to do with this “evidence”? They’ve updated their calcs/records… you pay the new figure and any interest owing.

I've just had a battle trying to reclaim CIS payments.

Came to £49k over (and including all of the) last 5 years.

They've finally paid, yet I get threats of debt collectors when my (much smaller) Corporation Tax bill isn't paid on time. Maybe if you gave me the money back you have taken off me, it would be paid on time.

I'd send them an invoice for the interest, but by poking the bear, you open yourself up to investigation. Not that I've anything to hide, all my transactions are digital and whiter than white, just CBA with the hassle

If you owe them, pay them to show you are cooperating.

Then, if you are sure you are correct, complain to your MP about their official error, with any evidence you have to support it.

Your MP will forward the complaint to HMRC. The HMRC casrworker and their entire management chain will spend 2-3 days pulling the case records to pieces to provide the information that the complaints team need to reply. This means none of their other cases will be actioned. Whether the complaint is justified or not.

Bonus points if you can include the caseworker going on holiday as one of your complaints.

Guess how I spent last week.

I’ve had the exact same scenario. Had to pay back some over payments so set up a payment plan of £x over 10 months DD.

They had just took the final payment, which was actually for more than the other 9. Had a letter last week saying the account was settled.

Logged in to check on the back of this thread and I still owe them another £10 interest somehow. Baffled.

If you get on the wrong side of HMRC it's likely they will take a keen interest in your filings to ensure everything is exactly as it should be and don't forget they can review historic tax returns; is that still 6 years?

Missus says, HMRC aren't fit for purpose, you will end up paying, she would try and fight it as well but good luck with that. If you have an accountant that can act as your agent there's a dedicated agent line that may yield better results.

That said she just found this:

HMRC interest rates are set in legislation and are linked to the Bank of England base rate. There are 2 rates:

late payment interest, set at base rate plus 2.5%
repayment interest, set at base rate minus 1%, with a lower limit of 0.5% (known as the ‘minimum floor’)

https://www.gov.uk/government/publications/rates-and-allowances-hmrc-interest-rates-for-late-and-early-payments/rates-and-allowances-hmrc-interest-rates

Guess how I spent last week

Cocking up an interest calculation? 😀

Cocking up an interest calculation? 😀

I'll have you know I cock up the bit before that!

is that still 6 years?

Depends on the nature of the naughtiness by the "Customer". In certain circumstances there's a very generous or even no time limit.

Why not use the acceptance in lieu scheme?

https://www.theguardian.com/culture/2023/dec/12/renaissance-bronze-apollo-donated-to-british-nation-to-pay-inheritance-tax-bill

Looks to be a totally fair and, not open to abuse at all, way to dodge tax.