As a consequence of the change in the Bank Of England base rate from 3% to 3.5%, HMRC’s interest rates for late payment and repayment will also increase.

These changes will come into effect on:

• 26 December 2022 for quarterly instalment payments
• 6 January 2023 for non-quarterly instalments payments

The HMRC publication Information on the interest rates for payments will be updated shortly.

HMRC interest rates are set in legislation and are linked to the Bank of England base rate. Late payment interest is set at base rate plus 2.5%. Repayment interest is set at base rate minus 1%, with a lower limit, or “minimum floor” of 0.5%.