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HMRC late payment interest rates to increase

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HMRC interest rates for late payments will be going up following the Bank of England interest rate rise to 0.25%.

The Bank of England Monetary Policy Committee voted on 16 December 2021 to increase the Bank of England base rate to 0.25% from 0.1%. HMRC interest rates are linked to the Bank of England base rate, therefore, HMRC interest rates for late payments will also increase.

These changes will come into effect on:

  • 27 December 2021 for quarterly instalment payments
  • 4 January 2022 for non-quarterly instalments

The current late payment and repayment interest rates applied to the main taxes and duties that HMRC currently charges and pays interest on are:

  • late payment interest rate — 2.75% from 4 January 2022
  • repayment interest rate — 0.5% from 29 September 2009

Corporation Tax pay and file

  • from 4 January 2022 late payments will be set at 2.75% and repayments at 0.50%.
  • from 4 January 2022 the same rates (late at 2.75% and repayments at 0.50%) will also apply to Corporation Tax pre-pay and file Stamp Duty Reserve Tax (to 30 September 1999) and Petroleum Revenue Tax – Reg 3AA
  • from 4 January 2022 the same above rates will apply to Corporation Tax Self Assessment, from normal due date

Interest rates for late and early payments – GOV.UK (www.gov.uk)

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