HMRC Interest Rates For Late Payments To Be Revised
Following the BoE interest rate rise to 1.75% ...
Posted by Roger Eddowes on 22/08/2022 @ 8:00AM
On the 4th of August 2022, the Bank of England increased the base rate to 1.75%. As HMRC interest rates are linked to the BoE base rate, they'll be increasing them soon ...
HMRC's rate of late payment interest encourages prompt payment!
For quarterly instalments, the changes will come into effect on the 15th of August 2022. For non-quarterly, it will be the 23rd of August 2022. The repayment interest rate will increase to 0.75% as this is set at the BoE rate minus 1% with a 0.5% lower limit.
"HMRC's interest rates are set in legislation and linked to the Bank of England base rate!"
Late payment interest is set at base rate plus 2.5% and the differential between late payment and repayment interest is in line with worldwide tax authorities and compares favourably with commercial rates.
Of course, the higher late payment interest encourages prompt payment. This, in turn, ensures fairness for those individuals who pay tax on time and compensates taxpayers for the loss of use of their money when they overpay or pay early.
Until next time ...
ROGER EDDOWES Business Godparent
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Roger trained at Edward Thomas Peirson & Sons in Market Harborough before working at Hartwell & Co, followed by Chancery, as a partner. He started Essendon Accounts and Tax with Helen Beaumont in 2014 as a general practitioner with a hands-on approach.
Roger loves getting his hands dirty, working with emerging, small-to-medium and family businesses to ensure they receive the best possible accountancy advice. Roger utilises an extensive network of business contacts to leverage the best guidance and practical solutions.
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