Taxes Consolidation Act 1997 section 1082

Interest on overdue income tax and corporation tax in cases of fraud or neglect

Section 1082 provides for a higher rate of interest on overdue income tax and corporation tax where the undercharge arose as a result of fraud or neglect, and sets out the notification and appeal procedures that apply.

• Where an undercharge to income tax or corporation tax results from fraud or neglect, interest is charged at 2 per cent per month or part of a month from the date the tax ought to have been paid until payment.
• The inspector must notify the person assessed that the higher 2 per cent rate applies, and the person may appeal on the ground that the higher rate should not apply.
• If an appeal against the higher rate succeeds, interest reverts to the standard rate chargeable under section 1080.
• This section ceased to have effect for chargeable periods beginning on or after 1 January 2005, but remains in force for liabilities arising from earlier periods.