HMRC interest rates increase again

Back to top

Following the Monetary Policy Committee’s decision to increase the Bank of England base rate to 4.5%, HMRC has announced increases to interest charged on both late paid tax and the rate paid on repayments of tax.

As HMRC interest rates are linked to the Bank of England base rate, the 11 May increase from 4.25% to 4.5% has triggered another increase in rates for late payments and repayment of tax.

The rate will increase with effect from 22 May 2023 for late quarterly instalment payments, HMRC has announced. Late payment interest for other late payments will increase from 31 May 2023.

The rate of interest on unpaid instalments of corporation tax liabilities is calculated as base rate plus one. It will increase to 5.5% from 22 May 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% from 31 May 2023.

The rate of interest paid by HMRC on the overpayment of tax is calculated as base rate minus one. It will increase to 3.5% on 31 May 2023.

Read more:

The Tax Faculty

ICAEW's Tax Faculty is recognised internationally as a leading authority and source of expertise on taxation. The faculty is the voice of tax for ICAEW, responsible for all submissions to the tax authorities. Join the Faculty for expert guidance and support enabling you to provide the best advice on tax to your clients or business.

More support on tax

ICAEW's Tax Faculty provides technical guidance and practical support on tax practice and policy. You can sign up to the Tax Faculty's free enewsletter (TAXwire) which provides weekly updates on developments in tax.

Sign up for TAXwire Join the Tax Faculty