HMRC has raised late payment interest rates on tax debt as of October 11, following the 0.5% increase in the base rate
This means that the late payment interest rate has now increased to 4.75%, starting on October 11, 2022. The rate last increased to 4.25% on August 23rd. This is the highest interest rate since the height of the financial crisis in January 2009.
Late payment interest is payable on late tax bills covering income tax, national insurance contributions (NICs), capital gains tax (CGT), Stamp Duty Land Tax (SDLT), and stamp duty reserve tax (SDRT). The interest rate on corporation tax self-assessment has also been raised to 4.75%.
The repayment interest rate will also be increased from the current 0.75% repayment interest rate to 1.25%.
Corporation tax self assessment interest rates relating to interest charged on underpaid quarterly installment payments rise to 3.25%, up from 2.75%, starting on October 3, 2022 (with the higher rate above applying from the normal due date).
The interest paid on overpaid quarterly instalment payments and on early payments of corporation tax not due by instalments rises to 2% from 1.5%. This began on October 3rd, 2022.
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Reference: GOV.UK
