A template letter to HMRC requesting a waiver of interest charged on a late tax payment, explaining the reason for the delay (here, being out of the country) and confirming that the tax has now been paid. Drafted for England & Wales (UK tax).
How to use this template, read this first - Replace every
[SQUARE-BRACKET]field before use. - Important, manage expectations. HMRC late-payment interest is statutory and generally payable by law: HMRC treats it as commercial restitution for paying late (the time value of money), not as a penalty. Unlike penalties, interest is not cancelled for a reasonable excuse. The scope for challenging it is normally limited to showing the interest was miscalculated, was not legally due, or arose because HMRC caused the underlying delay or error. By contrast, penalties (a separate charge) can be cancelled if you have a "reasonable excuse". Being abroad may help support a reasonable-excuse argument for a penalty, but is unlikely on its own to remove interest. - So: consider whether you are really challenging interest, a penalty, or both, and frame the request accordingly. Take advice from an accountant or tax adviser.
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[TAXPAYER NAME] [ADDRESS] [UTR] | [National Insurance No.]
[DATE]
HM Revenue & Customs [OFFICE / ADDRESS as per the demand]
Dear Sir or Madam,
Re: Request to waive/reduce interest [and any penalty] on late payment, [tax / reference] [YEAR]
- I refer to your notice dated [DATE] charging interest of £[AMOUNT] [and a penalty of £[AMOUNT]] in respect of the late payment of [tax type] for the period [YEAR] (reference [REF]).
- The payment. I have now paid the tax in full, payment of £[AMOUNT] was made on [DATE] [reference [ ]]. [I had no previous history of late payment.]
- Reason for the delay. The payment was late because [EXPLAIN (e.g. I was out of the country from [DATE] to [DATE] and, despite reasonable arrangements, was unable to access the funds/online banking to make the payment by the due date]. [Add any supporting circumstances) illness, bereavement, HMRC error or delay, IT/postal problems.]
- Request. In these circumstances I respectfully request that HMRC [waive/reduce the interest] [and cancel the penalty]. [If relevant: I believe the interest arose, in part, from HMRC's delay in [ ], and ask that it be reviewed accordingly.] [If relevant: I believe I have a reasonable excuse for the late payment for the purpose of any penalty.]
- Evidence. I enclose [travel dates/tickets, medical evidence, correspondence, proof of payment] in support.
I should be grateful if you would review the charges and let me know your decision. Please confirm the legal basis on which the interest has been charged and whether there is any formal appeal route in this case; if there is no formal right of appeal, please treat this as a complaint and a request for administrative review or reconsideration as appropriate.
Yours faithfully,
_________________________ [TAXPAYER NAME]
Enc: [list of documents]
--- This template is a starting point and not legal or tax advice. HMRC interest is generally non-discretionary while penalties may be cancelled for reasonable excuse, have a qualified accountant or tax adviser review and adapt this before sending. Governing law/jurisdiction: England & Wales (UK tax).
[DRAFT - requires solicitor/tax-adviser review before use]