HMRC increases late payment interest rate to 3%
Following the decision by the Bank of England to increase the base rate, HMRC has confirmed that the late payment interest rate has been raised by 0.25%, effective from 14th February 2022.
On 4th February 2022, HMRC announced that the current late payment interest rate applied to the main taxes and duties would rise to 3% from 2.75%, effective from 21st February 2022.
The increase applies to quarterly instalment payments (from 14th February 2022) and non-quarterly instalment payments (from 21 February 2022). This is the second rate rise in recent months, following the decision to increase the previous late payment interest rate in December 2021.
The 3% rate applies to late payments for:
- Income Tax
- National Insurance Contributions
- Capital Gains Tax
- Stamp Duty, Stamp Duty land Tax (SDLT), and Stamp Duty Reserve Tax.
The corporation tax pay and file rate will also rise to 3% for late payments. The repayment rate, however, remains unchanged at 0.5%.
The rate for corporation tax self-assessment, if unpaid from the normal due date, will also be charged at 3%. The interest charged on underpaid quarterly instalment payments rises to 1.5% from 1.25%.
Danielle Harvey, Director at Harvey Telford & Bates, said: “HMRC interest rates are linked to the Bank of England base rate, so it is no surprise that late payment interest rate will increase also.
If you need expert help, we offer a range of services to help minimise your corporate tax exposure and relieve you of the administrative burden of complying with tax legislation. Contact the team at Harvey Telford & Bates today for more information.”