Instalment interest

We calculate instalment interest compounded daily, according to your instalment requirements for the year.

We use the offset method to calculate instalment interest. This means we give you credit when you prepay or overpay your instalments, and this can reduce or eliminate the interest we charge on late or insufficient payments.

We do not refund any excess of this credit. It is used only when calculating instalment interest charges. See an example of how we calculate instalment interest and penalty.


Credit instalment interest is only calculated on instalment payments from the start of the tax year.

The interest rate on overpayments is lower than on underpayments; however, when we calculate instalment interest using the offset method, the interest rate is the same on prepayments and overpayments as it is on underpayments.

You can request an interest review or a Statement of Interest using "Make online requests" service at:

You can also view previously-issued statements using the "View mail" service using:

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