When is interest applied by Revenue?

If you do not pay Valued-Added Tax (VAT) on time, you will be charged interest. Interest is charged on a daily basis. This begins from the date the VAT payment is due until you pay the amount outstanding.

Where you have received a refund in excess of the amount due, you must pay interest on the overpayment.  Interest is payable from the date you received the overpaid amount.

The rate of interest is 0.0274% per day, or part of a day.

Interest on underpayment in direct debit scheme

Revenue can charge interest on any balance that is outstanding at the end of your accounting year.

The date Revenue uses to calculate the interest will depend on the percentage of the annual liability outstanding.

If you have paid 80% or more, Revenue will charge the interest from the due date of your end of year VAT 3 return, until the amount outstanding is paid.

If you have paid less than 80%, Revenue will backdate the interest to a date which is six months prior to the final date for filing your annual VAT return.

Interest on estimates and assessments

Where Revenue estimates your VAT liability, interest due on unpaid VAT is calculated on a daily basis. It starts from the date the VAT was payable.

Where Revenue issues an assessment, interest is calculated on a daily basis from the date the original VAT return was due.

An assessment may include VAT due in respect of more than one taxable period. In this case, interest may be calculated from the last taxable period included in that assessment.

This is the case, even where an appeal is lodged against the assessment.