HMRC late payment interest rates to be revised after Bank of England increases base rate

The Bank of England Monetary Policy Committee announced on 23 March 2023 to increase the Bank of England base rate to 4.25% from 4%.

HMRC interest rates are set in legislation and are linked to the Bank of England base rate.

As a consequence of the change in the base rate, HMRC interest rates for late payment and repayment will increase.

These changes will come into effect on:

⦁ 3 April 2023 for quarterly instalment payments, and

⦁ 13 April 2023 for non-quarterly instalments payments.

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%.

See: HMRC late payment interest rates to be revised after Bank of England increases base rate

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