Late payment interest rises again
A further increase in the Bank of England’s base rate means that HMRC’s late payment interest rates will rise again next week. What will the new rates be?
On 2 February, the Bank of England announced that it would increase the base rate of interest by 0.5%, to 4%. This is the tenth successive increase since December 2021. As HMRC’s late payment and repayment interest rates are linked to the base rate, they are also set to increase. From 13 February 2023 the following rates will apply:
- Late corporation tax paid quarterly - 5%
- Interest on overpaid corporation tax - 3.75%
From 21 February, the rates for other taxes will apply:
- Late payment interest - 6.5%
- Interest on overpaid tax - 3%
If your tax payment is outstanding, make the payment as soon as possible to avoid higher interest charges. Note that these will apply even if you agreed a time to pay arrangement with HMRC, so it's still more efficient for you to pay as much as you can sooner.
Related Topics
-
Increase the IHT-free part of your estate by 50%
Your father died leaving his entire estate to your mother who later remarried. You’ll inherit some or all of her estate depending on whether she dies before her husband. What steps can be taken to reduce the inheritance tax (IHT) on the estate?
-
Class 2 NI problems to continue beyond summer
The problems with incorrectly charged Class 2 NI have been widely reported. HMRC has just released an update, and it’s bad news for affected individuals. What’s the full story?
-
How much will you save with reduced scale charges?
HMRC has reduced the VAT fuel scale charge by nearly 6% for company-provided cars. When does the new reduced rate take effect and how do you make the calculations?