The Income Tax (Pay As You Earn) Regulations 2003

Interest on tax overdue

82.—(1) This regulation applies if an employer has not paid to the Inland Revenue the total net tax payable in respect of a tax year by the reckonable date.

(2) Any unpaid tax carries interest at the prescribed rate from the reckonable date until payment (“the interest period”).

(3) Paragraph (2) applies even if the reckonable date is a non-business day as defined by section 92 of the Bills of Exchange Act 1882(1).

(4) But paragraph (2) does not apply to any tax which the employer does not have to pay as a result of a direction made under regulation 72(5) or 81(4).

(5) Any change made to the prescribed rate during the interest period applies to the unpaid tax from the date of the change.

(6) The “total net tax payable” in respect of a tax year is—

(a)the total of any amounts payable by the employer under regulation 68 for tax periods in the tax year, less

(b)the total of any amounts recoverable from the Board of Inland Revenue under regulation 68(3)(b) for those tax periods.

(7) The “prescribed rate” means the rate applicable under section 178 of the Finance Act 1989(2) for the purposes of section 86 of TMA.

(8) The “reckonable date” means—

(a)17 days after the end of the tax year, if payment is made using an approved method of electronic communications, or

(b)14 days after the end of the tax year, in any other case.