Following the 13th consecutive increase in the Bank of England (BoE) base rate, HMRC’s interest rates on overpaid or underpaid tax will also increase. What are they and when will they take effect?
From 3 July 2023 the following rates will apply:
- Late corporation tax paid quarterly - 6%
- Interest on overpaid corporation tax - 4%
From 11 July, the rates for other taxes will apply:
- Late payment interest - 7.5%
- Interest on overpaid tax - 4%
In a press release HMRC states that 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. Anyone struggling to pay a tax debt should contact HMRC to try and agree a payment plan. This won’t prevent interest being charged, but will protect against penalties if the agreed terms are adhered to.