The Bank of England base rate of interest was increased to 1.25% earlier this week. Following this announcement, HMRC has raised interest rates of late tax bills by a further 0.25%.
From 5 July 2022, the late payment interest rate will increase to 3.75%. The rate last increased on 24 May to 3.5%. This is the highest rate since the height of the financial crisis in January 2009.
Late payment interest is payable on late tax bills covering income tax, National Insurance contributions, capital gain tax, stamp duty land tax, stamp duty and stamp duty reserve tax. The corporation tax pay and file rate also increases to 3.75%.
Corporation tax self assessment interest rates relating to interest charged on underpaid quarterly instalment payments will also rise to 3.75%.
The interest paid on overpaid quarterly instalment payments and on early payments of corporation tax not due by instalments rises to 2.25% from 27 June 2022, up from 2%.
The repayment interest rate remains unchanged at 0.5%.
