Topic: When does penalty interest kick in? – FLAT CHAT

This topic has 9 replies, 5 voices, and was last updated 14 years, 3 months ago by .

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30/05/2012 at 12:57 pm #8175 Reply | Quote
Billen Ben
Flatchatter
Section 79 of the SSMA says:

(2) A contribution, if not paid at the end of one month after it becomes due and payable, bears until paid simple interest at an annual rate of 10 per cent or, if the regulations provide for another rate, that other rate.

I have conflicting answers to a question.

Does interest begin to get charged from the due date of the payment or from the end of the one month period?

I will give an example. Say a quarterly payment is due on the 1^st of April. The one months “grace period” ends on the 1^st of May (one month as per s79(2)).

The levy payment has not been made at some later time. Is the interest on the overdue amount determined from the 1^st of April or the 1st of May?

Both my answers come from very reputable sources yet the answers lack consistency.

I have one answer that says interest is calculated from the 1^st of May i.e. interest is not charged for the “grace period” and I have another answer that says interest is charged from the 1^st of April i.e. the due date.

Which is it?
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Reply To: Reply #15662 in When does penalty interest kick in?

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