As HMRC interest rates are linked to the Bank of England base rate, the 3 August increase from 5% to 5.25% has triggered another increase in rates for late payments and repayment of tax.
The rate of interest on unpaid instalments of corporation tax liabilities is calculated as base rate plus one. It will increase to 6.25% from 14 August 2023.
The rate of interest for the late payment of other taxes is calculated as base rate plus 2.5, so will increase to 7.75% from 22 August 2023.
The rate of interest paid by HMRC on the overpayment of tax is calculated as base rate minus one. It will increase to 4.25% on 22 August 2023.
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