As HMRC interest rates are linked to the Bank of England base rate, its 22 September increase from 1.75% to 2.25% has triggered another increase in rates for late payments and repayment of tax.
HMRC has announced that the rate will increase with effect from 3 October 2022 for late quarterly instalment payments, and that late payment interest for other late payments will increase from 11 October 2022.
The rate of interest on unpaid instalments of corporation tax liabilities is calculated as base rate plus one. It will increase to 3.25% from 3 October 2022.
The rate of interest for the late payment of other taxes is calculated as base rate plus 2.5, so will increase to 4.75% from 11 October 2022.
The rate of interest paid by HMRC on the overpayment of tax is calculated as base rate minus one. It will increase to 1.25% on 11 October 2022.
- HMRC late payment interest rates to be revised after Bank of England increases base rate
- Rates and allowances: HMRC interest rates for late and early payments
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