Interest rates increase for late tax bills
HMRC has confirmed interest rates will rise by 0.25% on late tax bills.
The decision comes after the Bank of England increased the base rate to 1% last week.
From 24 May 2022, the late payment interest rate will increase to 3.5% from 3.25%, the highest rate since the 2009 financial crisis.
Late payment interest applies to income tax, capital gains tax, National Insurance, stamp duty land tax, stamp duty and stamp duty reserve tax.
HMRC confirmed that the corporation tax pay and file rate will also increase to 3.5%.
From 16 May 2022, interest charged on underpaid quarterly instalments for corporation tax self-assessment will increase to 2% up from 1.75%.
In addition, interest on overpaid quarterly instalments and on early payments of corporation tax not due in instalments, is set to increase from 0.5% to 0.75%, from 16 May 2022.
The repayment interest rate remains fixed at 0.5%.