- Interest Rate Revision: Following the Bank of England’s decision to cut the base rate to 4.75%, HMRC will revise its interest rates for late payments and repayments.
- Effective Dates: The revised rates will take effect from 18 November 2024 for quarterly instalment payments and from 26 November 2024 for non-quarterly instalment payments.
- Rate Calculation: HMRC interest rates are set by legislation and are linked to the Bank of England base rate, with late payment interest at base rate plus 2.5% and repayment interest at base rate minus 1%, with a minimum floor of 0.5%.
- Encouraging Prompt Payment: The differential between late payment and repayment interest rates is intended to encourage timely tax payments and ensure fairness for compliant taxpayers.
- Official Publication: HMRC published this update on 7 November 2024, and further information on the specific rates will be updated shortly.
Source:
- gov.im
- gov.uk – HMRC late payment interest rates to be revised after Bank of England lowers base rate
Note that this post was (partially) written with the help of AI. It is always useful to review the original source material, and where needed to obtain (local) advice from a specialist.
