Tag Archives: VAT-interest-rates

VAT late payment interest rates reduced

By   12 November 2024
HMRC has announced that late payment interest rates to be reduced after the Bank of England lowered the base rate.
The Bank of England base rate will be reduced to 4.75% from 5.0%.

The changes will come into effect on:

  • 18 November 2024 for quarterly instalment payments
  • 26 November 2024 for non-quarterly instalments payment

The press release is available here.

VAT: HMRC updated interest rates.

By   12 August 2024

On 1 August 2024, the Bank of England reduced the rate from 5.25% to 5%. HMRC interest rates are linked to the Bank of England base rate, and consequently, it has published updated its interest rate tables which recognises the .25% decrease. This interest applies to late VAT payments and repayments.

These changes will come into effect on:

  • 12 August 2024 for quarterly instalment payments
  • 20 August 2024 for non-quarterly instalments payments.

VAT: Late payment interest rates rise to 5.25%

By   5 September 2023
HMRC late payment interest rates for late payments will increase following the Bank of England interest rate rise to 5.25%. These changes will come into effect on:

  • 14 August 2023 for quarterly instalment payments
  • 22 August 2023 for non-quarterly instalments payments

VAT: Late payment interest rates increased

By   4 April 2023

HMRC has announced that interest rates for late payments will be revised following the Bank of England interest rate rise to 4.25%.

HMRC interest rates are linked to the Bank of England base rate.

As a consequence of the change in the base rate, HMRC interest rates for late payment and repayment will increase.

These changes will come into effect on:

  • 3 April 2023 for quarterly instalment payments
  • 13 April 2023 for non-quarterly instalments payments

Please also refer to Rates and allowances: HMRC interest rates for late and early payments.

VAT: Increase in interest rates

By   11 January 2023

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%.