Interesting enquiry

We have been dealing with an HMRC enquiry into a client's accounts and tax return and are in the process of agreeing a settlement figure.

We note that HMRC have included an addition to the current interest rate as 'risk factor' in the same way that commercial banks load the interest rate that they charge on loans.

We have not seen this before. Have other Taxation readers had experience of this and exactly what tax legislation empowers HMRC to do this? Replies would be welcomed.

Query 17 225 — Interested

Reply from BNB Tax Consultants

Interested has raised an 'interesting enquiry' regarding the powers that HMRC have with regard to charging interest. The sections relating to this are found in TMA 1970 ss 86 to 89.

Section 89 allows HMRC to set the interest rates. This is done by statutory instrument from time to time. None of these sections...