Once again, following the recent Bank of England announcement to increase the base rate to 5%, HMRC has announced that their interest rates are also increasing by 0.5%.

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: 7.5%
Repayment interest: 4%

The new rates will take affect from 11 July 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.