Commentary on Sections Other Enforcement Powers Section 51: Power to charge interest
222.Section 51 enables HMRC to charge interest on unpaid penalties and recoverable top-up payments.
223.Subsection (1) enables HMRC to charge a person interest if they have not paid a recoverable top-up payment or penalty assessed under section 41 or 47 by the due date. If it does so, HMRC must notify the person in writing that interest has been charged on the outstanding amount.
224.Subsection (2) provides that if HMRC notifies a person that interest will be charged, the amount outstanding will attract interest from the ‘start date’ until either the date specified in the notice or, if earlier, the date on which the debt is paid. If the debt has not been paid by the date specified in the notice, HMRC may issue a further notice which specifies a different, later, end date. This enables HMRC to extend the period for which interest is charged when a debt remains unpaid.
225.Subsection (3) sets out the date from which interest will be charged on debts assessed under section 41 and 47. For amounts assessed under section 41, it will be the day on which the person becomes liable under sections 35 to 40 to pay those amounts. In the case of penalties assessed under section 47, it will be the day on which the debt becomes overdue.
226.Subsections (4) and (5) define the end date for the interest as any specified day within 6 months of the date on which a notice is issued under this section.
227.Subsections (6) and (7) provide that interest charged under this section is payable at the same rate which applies to late payments of tax. This rate is currently set at 3%.
228.Subsection (8) provides that if two or more people have been notified that they are liable to pay interest on a debt, that interest can be enforced against them either individually or together.