- Interest Rate Adjustments: Following the Bank of England’s base rate cut from 4.75% to 4.5% on 6 February 2025, HMRC has revised late payment interest to 7.0% (base rate plus 2.5%) and repayment interest to 3.5% (base rate minus 1%, with a minimum rate of 0.5%), effective from 25 February 2025. Previously, these rates were 7.25% and 3.75%, respectively.
- Specifics for Corporation Tax: For large companies making quarterly installment payments of Corporation Tax, the late payment interest rate is reduced to 5.5% from 17 February 2025 (down from 5.75%). For overpaid installment payments and early payments not due by installments, the repayment interest rate is reduced to 4.25% from 4.50%.
- Applicable Taxes: These revised rates apply to most tax payments, including Corporation Tax, Income Tax, National Insurance contributions, and Capital Gains Tax. Further details on HMRC interest rates for late and early payments, including past rates, will be updated soon on the HMRC website.
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