Reduction in HMRC late payment interest rates

Following the Bank of England’s decision to reduce the base rate from 5% to 4.75%, HM Revenue and Customs (HMRC) have announced a reduction in their late payment interest rates.

HMRC interest rates track the base rate. Late payment interest (payable if you pay tax late) is set at base rate plus 2.5%. Repayment interest (which HMRC pay you on refunds or overpayments) is set at base rate minus 1%, with a minimum rate of 0.5%.

Therefore, the late payment interest rate will reduce to 7.25%. Repayment interest will reduce to 3.75%.

The reductions come into effect from the following dates:

• 18 November 2024 for quarterly instalment payments; and
• 26 November 2024 for non-quarterly instalments payments.

See: www.gov.uk/government/news/hmrc-late-payment-interest-rates-to-be-revised-after-bank-of-england-lowers-base-rate