HMRC Increase Interest Rates
HMRC late payment bills will be charged at 7.5% interest, this will come into effect from 11 July, this is the highest rate we have seen since 2001.
The late payment and repayment interest rates follow the rise in the Bank of England base rate to 5%, which increased on 22 June and are applied to the main taxes and duties that HMRC currently charges and pays interest. The rates will rise to:
- late payment interest rate — 7.5% from 11 July 2023
- repayment interest rate — 4.0% from 11 July 2023
This means that the late payment interest rate will increase by 0.5% to 7.5% from 11 July. The last rate increase was on 31 May.
Late payment interest is payable on late tax bills covering income tax, National Insurance contributions, capital gain tax, corporation tax pay and file, stamp duty land tax, stamp duty and stamp duty reserve tax. The corporation tax pay, and file rate will also increase to 7.5%.
Repayment interest will also be increased from the current 3.5% rate to 4%.
Corporation tax self-assessment interest rates relating to interest charged on underpaid quarterly instalment payments will see a rise to 5.25% from 5%.
With late payment interest now 2.5% above the Bank of England base rate, HMRC continues to pay lower interest to taxpayers affected by overpayments of tax at 4.75%, up from 4.25% .
The interest paid on overpaid quarterly instalment payments and on early payments of corporation tax not due by instalments has risen to 4.75% from 4.25%.
We can offer support, if you have any questions about these increase or how to make a payment please get in touch, we’re here to help.
If you need to find out more information you may find this link useful – HMRC interest rates for late and early payments
