Further increases to HMRC interest rates
In the wake of the “mini-Budget” and the resulting economic concerns, the increase in the Bank of England base rate to 2.25% and then 3.00% has resulted in a further increase to HMRC interest rates, following the already recent increase on 23 August 2022.
The rate of late payment interest for most taxes increased to 4.75% and the repayment interest rate increased to 1.25%, from 11 October 2022.
These rates will increase further, to 5.50% and 2.00%, respectively, with effect from 22 November 2022.
For corporation tax quarterly instalment payments the increases take effect sooner:
- From 3 October 2022 the interest rate on underpayments rose to 3.25%, with 2.00% payable to the company on overpayments, up to the usual due date.
- From 14 November 2022 the interest rate on underpayments will rise to 4.00%, with 2.75% payable to the company on overpayments, up to the usual due date.