Interest on income tax repayment?

bye_bye_band_G

I've a question about how the Inland Revenue works.

If you've overpaid your income tax in previous years, and the IR eventually send you a refund, they sometimes add interest on, don't they?
Does it depend on whether it was their incorrect calculation first time round or not?
I'm sure they'd pay interest if they'd made the mistake. But do they also pay interest if, say, your employer had given them the wrong information to start with, and so it wasn't actually their mistake?

(You can ignore the next bit if you like. This situation hasn't happened to me. I want to draw a comparison with the Inland Revenue to my local council who are refusing to pay me interest on a refund of council tax as I was incorrectly banded for the last 14 years. It's true, its not their mistake, it's the Valuation Office's mistake, but I feel that the council should still pay me interest on the refund as they had the benefit of my overpayment for all those years. If the IR pay out interest on an overpayment that wasn't their fault, then perhaps I can persuade the council to do the same.)

Help from tax experts gratefully received.

whatatwit

From what I remember, the Inland Revenue pays interest on repayments no matter who's fault it is. But, this is subject to a time limit in that interest is only paid for earlier years.

MXW

Interest is paid on tax refunds regardless of how the repayment has arisen, up to and including the tax years 2005-2006.

Hoddie_2

Repayment supplement can be withheld if the overpayment is the fault of the taxpayer. For instance, they paid an amount into SA without reason (estimating too high for example, or a self-calculation gone wrong), or perhaps they requested code BR was operated in order to withhold their correct code from their employer.