HMRC late payment interest rates to be revised after Bank of England increases base rate
HMRC interest rates for late payments will increase following the Bank of England interest rate rise to 5.25%.
皇冠体育app Bank of England Monetary Policy Committee announced an increase to the Bank of England base rate from 5.00% to 5.25% on 3 August 2023.
HMRC聽interest rates are linked to the Bank of England base rate.
Because the base rate has changed,聽HMRC聽interest rates for late payment and repayment will increase.
皇冠体育appse changes will come into effect on:
- 14 August 2023 for quarterly instalment payments
- 22 August 2023 for non-quarterly instalments payments
You can find information on the interest rates for payments on GOV.UK.
贬辞飞听HMRC聽interest rates are set
HMRC聽interest rates are set in legislation and are linked to the Bank of England base rate.
Late payment interest is set at base rate plus 2.5%. Repayment interest is set at base rate minus 1% with a lower limit, or 鈥榤inimum floor鈥�, of 0.5%.
皇冠体育app differential between late payment interest and repayment interest is in line with the policy of other tax authorities worldwide and compares favourably with commercial practice for interest charged on loans or overdrafts and interest paid on deposits.
皇冠体育app rate of late payment interest encourages prompt payment and ensures fairness for those who pay their tax on time, while the rate of repayment interest fairly compensates taxpayers for loss of use of their money when they overpay.