HMRC late payment interest rates to be revised

16 December 2022

Following the announcement of the increase of interest rate to 3.5% by the Bank of England, HM Revenue and Customs (HMRC) has outlined interest rates for late payments and repayments will be revised.

Consequently, these changes will come into effect on:

  • 26 December 2022 for quarterly instalment payments

  • 6 January 2023 for non-quarterly instalments payments

HMRC interest rates are set in legislation and are linked to the Bank of England base rate. The rate of late payment interest encourages prompt payment and ensures fairness for those who pay their tax on time, while the rate of repayment interest fairly compensates taxpayers for loss of use of their money when they overpay.

Therefore, as payroll professionals to remain complaint it is vital to have a controlled schedule of your PAYE payments and ensure the correct unique reference is used. You can read more on the topic on the GOV.UK site. Guidance link for information on the interest rates for payments on GOV.UK will be updated shortly.

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