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HMRC looks to cut costs to the bone

Those who have been overcharged tax in the past will know how difficult and time-consuming it can be to retrieve your hard earned money. However, historically the UK government has paid interest on tax which was taken in error and repaid this together with capital when the figures had been agreed. Sadly for those who have been overcharged on their tax bills, the government from today will be paying 0% interest on these balances which many see as a way of saving costs.

On the flip side of the coin there will be a reduction in the interest rate charged to those who have not paid their tax which will fall from 4.5% to 3.5%. So while the government is unwilling to pay interest on money it has taken from you in error it still expect you to pay 3.5% interest on overdue payments. Accountants across the UK are up in arms about the change to the regulations because some of their larger clients may have been overcharged to the tune of tens of thousands if not hundreds of thousands of pounds. Interest on these figures over a prolonged period can be significant and even more vital in the current economic environment.

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