The rate of interest charged on late payments by HM Revenue & Customs (HMRC) has increased, it has been announced.
It comes after the Bank of England (BoE) increased the base rate from 0.1 per cent to 0.25 per cent on 16 December last year.
According to the tax authority, the late payment interest rate for quarterly instalment payments has been increased from 1.1 per cent to 1.25 per cent from 27 December 2021, while the late payment interest rate for all other payments has increased from 2.6 per cent to 2.75 per cent from 04 January 2022.
This applies to late payments of Income Tax, National Insurance contributions, Capital Gain Tax, Stamp Duty Land Tax, Stamp Duty and Stamp Duty Reserve Tax, Corporation Tax, Inheritance Tax, and judgement debt taxation matters, among others.
The rate of interest paid by HMRC on repayments, meanwhile, remains unchanged at 0.5 per cent, as this rate is calculated as the higher of 0.5 per cent or the BoE base rate minus one.
Commenting on the changes, HMRC said: “As a consequence of the change in the base rate, HMRC interest rates for late payments will increase.
“These changes will come into effect on December 27, 2021 for quarterly instalment payments and January 4, 2022 for non-quarterly instalments payments. Repayment interest rates remain unchanged.”
More information can be found by clicking the following links:
The new rates come ahead of the 31 January 2022 Self Assessment deadline.
For help and advice with related matters, please get in touch with our team today.