News
The rate of late tax payments interest rates continues to rise
27 October 2022
From 11 October, the interest rates on late tax payments rise again in line with the Bank of England’s (BoE) latest base rate increase.
The BoE increased the base rate by 0.5 per cent to 2.25 per cent in September, as a result of inflation.
Due to this, the late payment and repayment interest rates applied to tax debts will rise to:
- Late payment interest rate — 4.75 per cent
- Repayment interest rate — 1.25 per cent
HMRC interest rates are set in legislation and linked directly to the base rate, so the latest rise has been automatically triggered by these changes.
The late payment rate last increased to 4.25 per cent on 23 August – the highest rate since January 2009.
This interest is due on late tax bills for:
- Income Tax
- National Insurance Contributions
- Capital Gains Tax
- Stamp Duty Land Tax
The file and pay rate for Corporation Tax increases to 4.75 per cent with effect from 11 October.
Meanwhile, the interest charged on underpaid quarterly instalment payments increase to 3.25 per cent and the interest paid on overpaid quarterly instalment payments and on early payments of Corporation Tax not due by instalments rose to two per cent from 3 October 2022.
You should be aware that any further increases in the BoE base rate could further drive-up these rates and increase the cost of tax debts.
Case Studies
-
Smiles all round for dental practice
-
A shared passion for architecture and a head for numbers
-
A taste for growth, a thirst for knowledge
-
Customer care is top of the list for packaging business
-
Cut above the rest in personal management style
-
Sometimes a business does exactly as it says on the tin
-
Child's play with proactive accounts management
-
A modern approach required for music moguls
-
Taxing demands with old school charm