Following the recent increase in the Bank of England base rate from 2.25% to 3% HMRC has confirmed there will be changes to the rates of interest they charge.
The BoE’s Monetary Policy Committee (MPC) voted 7-2 in favour of raising interest rates by 75 basis points to 3% in a move to try and reign in upward pressures on inflation. Inflationary pressures in the United Kingdom has continued to intensify since the MPC’s previous meeting. This is the eighth time in a row that the MPC has increased interest rates.
Accordingly, the HMRC late payment interest rate applied to the main taxes and duties increases by 0.75% to 5.50%.
These changes will come into effect on:
- 14 November 2022 for quarterly instalment payments; and
- 22 November 2022 for non-quarterly instalments payments.
The repayment interest rates applied to the main taxes and duties that HMRC pays interest on will increase by 0.75% to 2% from 22 November 2022. The repayment rate is set at the Bank Rate minus 1%, with a 0.5% lower limit.