Following the recent Bank of England announcement to increase the base rate to 5.25%, HMRC has announced that their interest rates are also increasing by 0.25%.
The last time interest rates were this high for these charges was in January 2008.
This means that the new rates are:
- Late payment interest: 7.75%
- Repayment interest: 4.25%
The new rates will take affect from 22 August 2023.
HMRC’s late payment rates are applied to the main taxes administered – and follow the base rate. The late payment interest charge is set at 2.5% above the base rate.
The repayment interest rate is set at a ‘minimum’ of 0.5% until the base rate reaches 1.5%, where it then increases based on the base rate.
