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ACCA Applied Skills · Taxation (UK) · The systems for self-assessment and the making of returns

Nadia disagrees with HMRC's decision on her 2024/25 return and has made an appeal. She also wants to know about the interest on tax later found to be overpaid. Which rate applies to overpaid tax under the tax tables?

The rate of interest on overpaid tax is 3.50%. The 8.50% rate applies to underpaid tax, and the 3.75% official rate applies to beneficial loans, so neither is correct for tax repaid to the taxpayer.

  1. A3.75%
  2. B8.50%
  3. C3.50%Correct
  4. D6.00%

Explanation

The tax tables give a rate of interest on overpaid tax of 3.50%. The 8.50% rate is for underpaid tax and 3.75% is the official rate of interest used for beneficial loans.

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