General interest charge

General interest charge (GIC) applies to unpaid tax liabilities, such as when:

• an amount of tax, charge, levy or penalty is paid late or is unpaid
• there is an excessive shortfall in an incorrectly varied or estimated income tax instalment.

On this page

• How much GIC is applied
• Effect of GIC on income tax
• Remission of GIC on late payment of debts

How much GIC is applied

We review the GIC rate quarterly. GIC is calculated on a daily compounding basis on the amount outstanding.

Generally, the amount of GIC applied is notified in a statement of account, a late payment notice or GIC notice.

Effect of GIC on income tax

You can claim a tax deduction for GIC in the year that it's incurred.

On the other hand, you're required to disclose remitted GIC in the year the remission occurs. This applies if you claimed a deduction (or can still claim a deduction) for the GIC incurred.

Remission of GIC on late payment of debts

You can ask us to remit the GIC on your debt in part or in full if there are extenuating circumstances, such as:

• the delay in payment being not due to you (for example, natural disasters, industrial action, the unforeseen collapse of a major debtor or the sudden ill health of key personnel) and you took reasonable action to reduce the delay
• the delay in payment being due to you, but you took reasonable action to reduce the delay, and it is fair and reasonable to remit
• payment of the full amount of GIC would result in serious financial hardship for you.

For more information, see PS LA 2011/12 Remission of General Interest Charge.