[20.08.22]

HMRC interest rates for late payment of taxes is linked to the Bank of England base rate.  Therefore, following the Monetary Policy Committee’s decision on 4^th August to increase the base rate to 1.75%, HMRC has announced increases to both interest charged on late paid tax and the rate paid on repayments of tax.

The rate increased with effect from 15^th August 2022 for late quarterly instalment payments, and that late payment interest for other late payments increased from 23^rd August 2022.

The rate of interest on unpaid instalments of corporation tax liabilities is calculated as base rate plus one; and therefore increased to 2.75% from 15^th August 2022.

The rate of interest for the late payment of other taxes is calculated as base rate plus 2.5, so increased to 4.25% from 23 August 2022.

The rate of interest paid by HMRC on the overpayment of tax will also increase to 0.75% on 23^rd August 2022 – the first change since September 2009. The repayment rate is calculated as the higher of 0.5% and base rate minus one.

Castletons Accountants