A hike in the rate of interest charged on late tax contributions has prompted accountants to accuse the Inland revenue of profiteering.

The taxman has increased the interest rate from 6.5% to 7.5% on overdue payments, yet the interest that it pays to taxpayers increased from 2.5% to a rate of just 3.5%.

A spokesman for the Revenue said: "If the interest rate on unpaid tax is too low it may encourage people to treat the Revenue as a source of cheap credit."

Meanwhile the National Audit Office held its first meeting on the self-assessment regime recently as part of a full-scale inquiry into why one in ten forms is filed late, and almost a third are unfortunately completed incorrectly. The public spending watchdog is aiming to publish its findings in Spring of next year.

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