HMRC will raise interest rates on tax debt from 6 January following the latest 0.5% increase in the Bank of England base rate
The Bank of England base rate was increased to 3.5% on 15 December.
The current late payment and repayment interest rates applied to the main taxes and duties that HMRC currently charges and pays interest on are:
- late payment interest rate — 6% from 6 January 2023
- repayment interest rate — 2.5% from 6 January 2023
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This means that the late payment interest rate will increase by 0.5% to 6% from 6 January. The rate last increased to 5.5% on 22 November. This is the highest rate since the height of the financial crisis in January 2009.
Late payment interest is payable on late tax bills covering income tax, National Insurance contributions, capital gain tax, stamp duty land tax, stamp duty and stamp duty reserve tax. The corporation tax pay and file rate also increases to 6%.
The repayment interest rate will also be increased from the current 2% repayment interest rate to 2.5%.
Corporation tax self assessment interest rates relating to interest charged on underpaid quarterly instalment payments rises to 6%, up from 5.5%.
The interest paid on overpaid quarterly instalment payments and on early payments of corporation tax not due by instalments rises to 2.5% from 2%.
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