Posted by jonathanfullarton - June 28, 2023 9:46 am HMRC increases interest rates for late payments

updated 3 August 2023

Following the recent increase to 5.25% the Bank of England base rate HMRC will be increasing the interest rate it charges for late payment of tax.

What will the new rates be?

HMRC interest rates are linked to the Bank of England base rate. Therefore, any rise, or fall, affects the interest rate that HMRC will charge late payment of tax.

HMRC’s late payment interest rate is set at base rate plus 2.5% so will, from the 22 August, rise to 7.75%. Repayment interest is set at base rate minus 1%, with a lower limit of 0.5%. Therefore, from this date HMRC’s repayment rate of interest will also increase to 4.25%.

Of course, if the Bank of England continues to raise its base rate then the late payment interest rate will further increase.

For more details please visit the Gov.UK website.