I mentioned on another thread that there is a question over whether a penalty might apply to an unpaid portion of an APN if you have agreed to pay in instalments.
Surprisingly HMRC has committed and answer in writing.
If a person is unable to pay an amount of tax and contacts HMRC before the point a penalty for late payment becomes chargeable (the penalty date) asking for time to pay the charge, the late-payment penalty is not charged provided that HMRC agree to the time-to-pay request and the taxpayer keeps to the terms agreed. If the request for time to pay is made later than the penalty date, the penalty is charged in the normal way irrespective of any time-to-pay arrangement. There is a full right of appeal against these penalties. The legislation dealing with this can be found in the Finance Act 2009 at section 108 or paragraph 10 to Schedule 56, depending on the tax charge at issue.
Interest is not affected by time-to-pay arrangements and runs as normal from the point a charge becomes due to the point it is paid. Interest is not charged on late payment of an Accelerated Payment Notice itself, but from the normal due date for the tax. Interest might be charged on late payment of a penalty, depending on which tax the penalty relates to (for example, interest is charged on late payment of penalties in income tax and capital gains tax).
I hope this answers your question, but please come back to me if there is anything you would like clarified.
There are some questions arising from this response but I think it's a rare shaft of common sense in an immense cluster shambles.
I will be going back with some questions. If you want to add some of your own, pile in please.
Surprisingly HMRC has committed and answer in writing.
If a person is unable to pay an amount of tax and contacts HMRC before the point a penalty for late payment becomes chargeable (the penalty date) asking for time to pay the charge, the late-payment penalty is not charged provided that HMRC agree to the time-to-pay request and the taxpayer keeps to the terms agreed. If the request for time to pay is made later than the penalty date, the penalty is charged in the normal way irrespective of any time-to-pay arrangement. There is a full right of appeal against these penalties. The legislation dealing with this can be found in the Finance Act 2009 at section 108 or paragraph 10 to Schedule 56, depending on the tax charge at issue.
Interest is not affected by time-to-pay arrangements and runs as normal from the point a charge becomes due to the point it is paid. Interest is not charged on late payment of an Accelerated Payment Notice itself, but from the normal due date for the tax. Interest might be charged on late payment of a penalty, depending on which tax the penalty relates to (for example, interest is charged on late payment of penalties in income tax and capital gains tax).
I hope this answers your question, but please come back to me if there is anything you would like clarified.
There are some questions arising from this response but I think it's a rare shaft of common sense in an immense cluster shambles.
I will be going back with some questions. If you want to add some of your own, pile in please.
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