Interest rate increase – what does this mean for late self-assessment payments?
HMRC has increased the interest rate for late payments from 2.75% to 3% effective from 21 February 2022. The increase comes as The Bank of England announced an increase in the base rate from 0.25% to 0.5% on 3 February 2022.
The 3% rate is applied to late payments for main taxes and duties, including late payments for income tax, capital gains tax, National Insurance contributions, stamp duty land tax, stamp duty, and stamp duty reserve tax.
An increase in the interest rate means that any self-assessment taxpayers who missed the 31 January deadline will see their late payment interest costs rise, if their tax bill is still unpaid by 21 February 2022.
From 1 February, interest has been due on late self-assessment payments at a rate of 2.75% however, this will increase to 3% for any unpaid tax from 21 February.
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