Thanks. So this means interest should be calculated on remaining amount 840.53 from 31/01/2022. Is my understanding correct?
I just wanted to understand the interest calculations after amendment of self assessment return.
My first self assessment return for 2020-21 had tax overpaid by £1189.40. But I also had late payment penalty of £100 added to my account for previous year and there was no notification sent for this. So I was not aware and hence late interest was added on top. Finally I received payment of £1087.33 in my account on 19th Oct after deduction of late penalty £100 and interest of £2.07 (1189.40-100-2.07)
On amending my return now, tax overpayment is reduced to 246.80. So ideally I owe 840.53 (1087.33 - 246.80) from 31 Jan 2022 assuming if I had done it correctly the first time.
Should the interest now be calculated on 840.53 from 31 jan 2022 onwards (considering different interest rates through the year) until the day payment is made?
Yes. This is normally calculated automatically for your account after you submit self assessment return. As you already have unclaimed money in your SA account then new tax will be adjusted. Generally takes few days to reflect on the current position of account.
You will see "There is nothing to pay" later.