HMRC increase interest rates on late tax bills
From 5 July, HMRC will increase interest rates on late tax bills. This follows the Bank of England’s decision to raise the base rate to 1.25%.
Furthermore, HMRC confirmed that interest rates will rise by a further 0.25% on late tax bills. As a result, late payment interest rates will increase to 3.75% from 5 July. This is the highest rate since the peak of the financial crisis in 2009.
When is late payment interest due?
Late payment interest is due on late tax bills. This includes:
- Income tax
- Capital gains tax
- National Insurance contributions
- Stamp duty
- Stamp duty land tax
- Stamp duty reserve tax
In addition, HMRC confirmed that the corporation tax pay and file rate will increase to 3.75%. It was also confirmed that corporation tax self-assessment interest rates, for underpaid quarterly installment payments, will rise to 3.75%. This is up from 3.5%.
Interest on overpaid quarterly instalment payments of corporation tax will increase to 2.25%, from 27 June. Likewise, early payments of corporation tax not due by instalments will rise to 2.25%, up from 2%.
The repayment interest rate will remain at 0.5%. It remains fixed since September 2009.