COM82030 - Interest: interest objections and amendments: considering an interest objection
Source: gov.uk (2025-12-08)


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Late payment interest is charged under Section 87A TMA 1970 on all mainstream CT paid late:
- from the normal due date (please see Glossary)
- to the effective date of payment (EDP), which is the date on which the payment is regarded as received by HMRC
Debit interest is charged under Section 87A TMA 1970, as extended by Regulation 7 of the Corporation Tax (Instalment Payments) Regulations 1988 (SI 1988 No. 3172), on a quarterly instalment payment paid late:
- from the instalment due date
- to the EDP, which is the date on which the payment is regarded as received by HMRC or to the normal due date, if that is earlier than the EDP
Please note:

1. Interest is not charged on penalties and interest itself.

2. The normal due date is a non-interest bearing date, therefore late payment interest is calculated from the following day.

3. Each instalment due date is a non-interest bearing date for that instalment. Interest on each instalment therefore begins the following day.

4. A payment is not deemed to be paid until midnight of the day it is posted. This means that:
- late payment and debit interest is calculated to this date inclusive
- credit interest is not calculated on that amount until the following day
COTAX automatically reviews the late payment interest position when a payment or charge is recorded.

COTAX does not automatically calculate and charge late payment interest where the Clerical Interest Indicator (CII) is set to ‘Y’ or there is a struck off date on the record that is in the past.

Late payment interest continues to accrue throughout recovery proceedings.

COTAX automatically calculates credit and debit interest when the due date has passed and a self assessment has been recorded.

COTAX does not automatically calculate and charge credit and debit interest where the Credit/Debit Interest Indicator (CDII) is set to ‘Y’ or there is a struck off date on the record that is in the past.

See COM80000 (https://www.gov.uk/hmrc-internal-manuals/cotax-manual/com80000) for further information on how credit, debit and late payment interest is calculated.

The basic rule when considering an objection to interest charged under Section 87A is:
- late payment interest is always charged from the normal due date on all unpaid amounts
- debit interest is always charged from the quarterly instalment due dates on payments made late
The following have no effect on the normal due date or the quarterly instalment due dates, because they are fixed relative to the AP start and end dates.
- whether the notice to deliver was delivered late or not at all
- whether the return has been submitted or not
- the date the underlying tax was raised by recording the self assessment
- the date a revenue determination or assessment was made
- any appeal against an assessment or amendment
- the time taken by HMRC to deal with enquiries
Additionally, any reason given by the objector for late payment does not affect the interest charge.

In a proceedings case, however, an interest charge may need amending because, for example, further liability later becomes payable or the tax is reduced.

The interest must be recalculated to ensure that the new interest charge is correct.

Where further liability arises on a previously cleared enforcement case, the pursuit status LA-ENF is automatically reinstated.

See:
- COM80000 (https://www.gov.uk/hmrc-internal-manuals/cotax-manual/com80000) for more information
- COM82021 (https://www.gov.uk/hmrc-internal-manuals/cotax-manual/com82021) for a list of forms relevant to this subject
- COM82031 (https://www.gov.uk/hmrc-internal-manuals/cotax-manual/com82031) for legislation applying to this subject.