Due to the fact that HMRC interest rates are pegged to the Bank of England base rate, which increased from 1.25% to 1.75% earlier this month, late tax payment interest charges have also increased.
The rate for late quarterly instalment payments increased on 15th August, and late payment interest for other late payments will increase with effect from 23rd August.
A corporation’s tax liability accrues interest at a rate equal to the base rate plus 1% for any unpaid instalments. The rate went up to 2.75% as of the 15th of August.
Interest on overdue payments of other taxes will rise to 4.25% from the current 2.75% as of 23rd August (based on a base rate of 2.75%).
On the same date, for the first time since 29th September 2009, the interest rate HMRC pays on tax overpayments will climb to 0.75%. The interest rate for making payments is determined by whichever is greater:
- 0.5%; and
- base rate minus one.
If you’re in need of advice and support following the recent inflation and interest hikes, BK Plus are here to make it as easy for you and your business as possible. Get in touch with us at firstname.lastname@example.org.