HMRC late payment and repayment interest rates

08 August 2022

Following the change to the Bank of England bank rate, Her majesty’s Revenue and Customs (HMRC) will be increasing interest rates.

These interest rates are set in legislation and are set as follows:

  • late payment interest rate is the bank rate plus 2.5%
  • repayment interest is set at the bank rate minus 1%, but with a lower limit of 0.5%.

As the base rate has now reached 1.75%, repayment interest will now rise with the bank rate should it increase further.

From 23 August 2022, the rates will be:

  • Late payment interest – 4.25%
  • Repayment interest – 0.75%

Up to that date the rates will be 3.75% and 0.5% respectively.

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