Can the Welsh Revenue Authority charge interest on unpaid late payment interest under section 158?

No. Section 158 of the Tax Collection and Management (Wales) Act 2016 explicitly prevents WRA from charging interest on interest. If late payment interest itself remains unpaid, no further interest accrues on that unpaid interest amount. This anti-compounding rule protects taxpayers from rapidly escalating liabilities arising from interest being layered upon interest.

Does late payment interest start accruing if the start date falls on a weekend or bank holiday?

Yes. Under section 158, the late payment interest start date does not need to be a business day. Even if the relevant date falls on a weekend or bank holiday as defined in the Bills of Exchange Act 1882, interest begins to accrue from that date. There is no deferral to the next working day.

How does a set-off between WRA and a taxpayer affect late payment interest?

When WRA owes a taxpayer money and simultaneously the taxpayer owes tax, the amounts can be set off against each other. Under section 158, the date of set-off is treated as the date of payment. Late payment interest stops accruing on the set-off amount from that date, just as it would with an actual cash payment.

What rate is used to calculate late payment interest under the Tax Collection and Management (Wales) Act 2016?

The late payment interest rate is determined under section 163(1) of the Tax Collection and Management (Wales) Act 2016. This provision empowers Welsh Ministers to set the applicable rate through regulations. The rate applies to all overdue devolved taxes, penalties, and tax credit amounts where late payment interest is charged by WRA.

Tax Collection and Management (Wales) Act 2016 section 158

Late payment interest: supplementary

Section 158 sets out supplementary rules that apply to the calculation and operation of late payment interest charged by the Welsh Revenue Authority (WRA) on overdue devolved taxes, penalties, and tax credit amounts.

Late payment interest cannot be charged on top of other late payment interest — there is no compounding of interest on interest.
The start date for calculating late payment interest can fall on a non-business day (such as a weekend or bank holiday), so interest begins to accrue regardless of whether that day is a working day.
The date of payment of an amount includes the date on which that amount is set off against a sum owed by WRA to the taxpayer.
The late payment interest rate is determined under section 163(1) of the Act, which provides for rates to be set by Welsh Ministers through regulations.

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