Following the reduction in the Bank of England base rate by 0.25%, HMRC's interest rates for late payments and the repayment of tax will also be reduced.
HMRC interest rates are set in legislation and linked to the Bank of England base rate which reduced from 5.25% to 5.00% on 31 July 2024.
The changes apply as follows:
- From 12 August 2024 for companies in the Corporation Tax quarterly instalment payment regime
- Interest charged on underpaid quarterly instalment payments: 6.00% (was 6.25%).
- Interest paid on overpaid quarterly instalment payments and on early payments of Corporation Tax not due by instalments: 4.75% (was 5.00%).
- From 20 August 2024 for Non-quarterly instalment payments
- Late payment interest: 7.50% (was 7.75%).
- Repayment interest: 4.00% (was 4.25%).
Useful guides on this topic
Corporation Tax instalment payments
When does Corporation Tax (CT) have to be paid by instalments? What are the rules and deadlines?
Penalties: Late Payment
What penalties are charged when tax is paid late?
Time to Pay agreement
Businesses and self-employed taxpayers with outstanding tax liabilities may be eligible for support with their tax affairs through HMRC’s Time To Pay service.
External source
HMRC late payment interest rates to be revised after Bank of England cuts base rate
