Taxes Consolidation Act 1997 section 1089

Status of interest on certain unpaid taxes and duties

Section 1089 provides that interest charged on unpaid tax is payable gross (without deduction of income tax) and is not deductible in computing income, profits or losses for tax purposes.

• Interest on late payment of stamp duty, VAT, relevant contracts tax (RCT) and PAYE must be paid without any deduction of income tax at source.
• Such interest cannot be claimed as a deduction when calculating income, profits or losses for income tax purposes.
• Interest on unpaid wealth tax or capital acquisitions tax (CAT) is likewise not deductible in computing income, profits or losses for income tax or corporation tax purposes.
• The effect is that late payment interest on any of these taxes is a pure cost to the taxpayer with no tax relief available.