Late payment interest rates on underpaid taxes will soon decrease due to the recent reduction in the Bank of England’s base rate to 5% from 5.25%. What are the new rates?
As HMRC’s late payment and repayment interest rates are linked to the base rate, they will also come down. This will be the first time the interest rates have been lowered since March 2020.
From 12 August 2024 the following rates will apply:
Late corporation tax paid quarterly - 6%
Interest on overpaid corporation tax - 4.75%
From 20 August 2024, the rates for other taxes will be:
Late payment interest - 7.5%
Interest on overpaid tax - 4%
Whilst the reduction is welcome, the rates are the same as they were this time last year. Ensure all tax payments are made on time to avoid penalty interest.
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