The UK HMRC has announced a revision of late payment and repayment interest rates following the Bank of England’s recent cut to the base rate from 5.25% to 5.0% on 1 August 2024.
New interest rates
- Late payment interest rate: From 20 August, the late payment interest rate will be cut to 7.5% from 7.75%, where it has been for the last 12 months.
- Repayment interest rate: This will decrease to 4.0%, down from 4.25%, also effective from 20 August 2024. The repayment interest is calculated by subtracting 1% from the base rate, with a minimum rate of 0.5%.
Specific changes for corporation tax
For corporation tax quarterly instalment payments, the late payment interest rate will be 6.0% starting from 12 August 2024, reduced from the previous rate of 6.25% that was in effect from 14 August 2023.
Starting 12 August, the interest on overpaid quarterly instalment payments and early payments of corporation tax not due by instalments will decrease by 0.25% to 4.75%, down from 5%.
