As HMRC interest rates are linked to the Bank of England base rate, the 3 November increase from 2.25% to 3% has triggered another increase in rates for late payments and repayment of tax.
HMRC has announced that the rate will increase with effect from 14 November 2022 for late quarterly instalment payments. Late payment interest for other late payments will increase from 22 November 2022.
The rate of interest on unpaid instalments of corporation tax liabilities is calculated as base rate plus one. It will increase to 4% from 14 November 2022.
The rate of interest for the late payment of other taxes is calculated as base rate plus 2.5, so will increase to 5.5% from 22 November 2022.
The rate of interest paid by HMRC on the overpayment of tax is calculated as base rate minus one. It will increase to 2% on 22 November 2022.
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