Revenue Interest - Simple or Compound

[quick14ya]

Hi everyone,

I have searched online but cannot find an answer to my question.

I am wondering if Revenue Interest on late/non-payment of CAT/CGT/Income Tax/ VAT etc. is charged as simple interest or compound interest (by compound interest I mean is interest charged on interest?) I think thats the right term!

In other words, if Revene are owed 10000 in Income Tax for 10 years, is the calculation 10000 x.0219% x 365 x 10?
That results in an interest charge after 10 years of 7993.50??

Also, is Interest charged on the penalty also or just the tax amount?

Thanks in advance

 

[torblednam]

Simple interest, charged on the tax amount only, and any payments made are taken as reducing the tax balance first (ie any penalty and interest are collected after the tax itself is fully cleared).

 

[quick14ya]

Simple interest, charged on the tax amount only, and any payments made are taken as reducing the tax balance first (ie any penalty and interest are collected after the tax itself is fully cleared).

Thanks very much, going by that my example above re 10,000 over 10 years is correct, whether for Income Tax, CAT or CGT, yes?
I know the rate is different for VAT.