HMRC late payment interest cut

HMRC has reduced late pay­ment and repay­ment inter­est rates fol­low­ing the cut to the base rate.

The Bank of Eng­land cut the base rate to 4.75% on 7 Novem­ber, the sec­ond reduc­tion this year.

This has trig­gered a cut in HMRC inter­est rates which are pegged to the base rate.

From 26 Novem­ber, the late pay­ment inter­est rate was cut to 7.25% from 7.5%. The repay­ment inter­est rate was also reduced to 3.75% from 4.0% from 26 Novem­ber.

HMRC late pay­ment inter­est is set at base rate plus 2.5%. Repay­ment inter­est is set at base rate minus 1%, with a low­er lim­it — or ‘min­i­mum floor’ — of 0.5%.

Cor­po­ra­tion tax self assess­ment inter­est rates relat­ing to inter­est charged on under­paid quar­ter­ly instal­ment pay­ments dropped to 5.75% from 6.0% from 18 Novem­ber.

The inter­est paid on over­paid quar­ter­ly instal­ment pay­ments and on ear­ly pay­ments of cor­po­ra­tion tax not due by instal­ments is down by 0.25% to 4.5% from 5% from 18 Novem­ber.

Inter­net link: GOV.UK