HMRC Interest Rates to Rise This Month

You will, no doubt have seen the news that the Bank of England raised the base rate of interest from 4.25% to 4.5% on 11^th May. 

Because HMRC’s interest rates are linked to these base rates, it has announced that another increase has been triggered for the rate of interest on late payments and repayments of tax.

From 22^nd May, the rate of interest for late quarterly instalment payments will increase and the interest for other late payments will rise from 31^st May

For unpaid instalments of corporation tax, the interest is calculated as base rate +1. It will, therefore, increase to 5.5% from 22^nd May. 

For the late payment of other taxes, the interest rate is calculated as base rate + 2.5. That means this increase will make the rate 7.5% from 31^st May. 

As for interest paid by HMRC on the overpayment of tax, the rate is calculated as base rate -1, meaning it will rise to 3.5% on 31^st May.    

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