The UK’s tax, payments and customs authority (HMRC) has updated its guidance on interest rates for late and early tax payments on 27 March 2025.
This rate was effective from 6 April 2025.
The late payment interest rate will rise by 1.5 percentage points from the base rate plus 2.5% to the base rate plus 4.0%. The base rate, set by the Bank of England, is 4.5% as of 6 February 2025, resulting in a late payment interest rate of 8.5%. The repayment interest rate will remain unchanged at 3.5%, with a lower limit of 0.5%.
Different rates apply for corporation tax quarterly installment payments, with an underpayment rate of 7.0% and an overpayment rate of 4.25%, both effective from 6 April 2025.
These changes apply to most tax payments, including Corporation Tax, Income Tax, National Insurance, and Capital Gains Tax.
Earlier, the UK autumn budget announcements were delivered on 30 October 2024.
