Taxpayers who overpay their tax to the IRD will be refunded in due course. Taxpayers who do not meet their tax obligations may face penalties and interest charges. This is often called use of money interest (UOMI). To avoid such charges, you should pay the full amount of tax you owe by the due date.
For more information refer to the IRD links below.
Interest applies to these taxes, duties, and revenue types:
Interest gets calculated daily on your 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.
Penalties & Interest – IRD-
The IRD know that many taxpayers are coming under increasing financial pressure to pay their taxes in full and on time because they have been adversely affected by COVID-19. To keep your business going, Cornish Accounting may need to make arrangements with the IRD to pay your tax over time. 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.
One of the following solutions may be right for you:
Note: Please advise the IRD if you are unable to pay any tax before the due date.