IRD Interest on tax overpayments and underpayments (UOMI) increase.
If you overpay any tax the IRD pay you back with interest. If you underpay tax, the IRD charge you interest. The IRD may also charge a penalty with interest. This is often called use of money interest, or UOMI.
If your ability to make a tax payment on time has been affected by COVID-19, the IRD may be able to write off use-of-money interest.
Thee UOMI increased to 7.28% on 10 May 2022
Interest gets calculated daily on your overpaid or underpaid tax. It does not compound and is not included when calculating penalties.
The interest rates are set by government and are based on market rates, so they vary over time.
|When interest rate started||Debit rate||Credit rate|
|10 May 2022||7.28%||0.00%|
|8 May 2020||7.00%||0.00%|
|29 August 2019||8.35%||0.81%|
|8 May 2017||8.22%||1.02%|
|8 May 2016||8.27%||1.62%|
|8 May 2015||9.21%||2.63%|
When interest starts:
If you’ve underpaid tax, interest:
- starts on the day after the original due date for the amount owing, or
- stops on the day the overdue balance (including interest) gets paid in full.
If you need to file a tax return to get a refund of your overpayment, interest starts on the latest of the:
- original due date
- day after the payment that generates the refund (that’s when the credit becomes available)
- date you filed your return.
In most cases, interest stops the day the overpaid tax is refunded or transferred to another tax account or period.