Following on from our last increase in rates blog post, HMRC have announced they will be rising their interest rates for the fourth time on late paid tax and the rate paid on repayments of tax.
The new rate of interest for late payment and repayment is increasing to 4.25% from 4%. These changes will come into effect from 3rd April 2023 for late quarterly instalment payments. Late payment interest for all other late payments will increase from 13th April 2023.
Corporation tax late payment interest is calculated as base rate plus 2.5%. The rate of interest is increasing to 5.25% from 3rd April 2023.
The current late payment and repayment interest rates of other taxes are:
- late payment interest rate is set at base rate plus 2.5%, and will increase to 6.75% from 13th April 2023
- repayment interest rate is set at base rate minus 1%, with a lower limit - or 'minimum floor' of 0.5% and will increase to 3.25% from 13th April 2023
For more information please visit: https://www.gov.uk/government/news/hmrc-late-payment-interest-rates-to-be-revised-after-bank-of-england-increases-base-rate--11