On 7 November 2024, the Monetary Policy Committee announced its decision to reduce the Bank of England base rate from 5% to 4.75%. This affects the rates of interest charged by HMRC as HMRC’s rates are linked to the Bank of England base rate.  

HMRC has confirmed that:   

• the interest rate for late quarterly instalment payments of corporation tax is reduced from 6% to 5.75% from 18 November 2024;
• the interest rate for the late payment of other taxes is reduced from 7.5% to 7.25% from 26 November 2024; 
• the interest rate paid by HMRC on the overpayment of quarterly instalment payments of corporation tax is reduced from 4.75% to 4.5% from 18 November 2024; and   
• the interest rate paid by HMRC on the overpayment of other taxes is reduced from 4% to 3.75% from 26 November 2024. 

The Monetary Policy Committee will next review the base rate on 19 December 2024.  

At the Autumn Budget 2024, the government announced that the interest rate charged by HMRC on unpaid tax liabilities will increase by 1.5 percentage points with effect from 6 April 2025. Assuming there are no changes to the Bank of England base rate before then, the interest rate for late payments will increase to 7.25% for quarterly instalment payments of corporation tax, and to 8.75% for other taxes.  

The reduction in the base rate also affects rates for save as you earn (SAYE) share option schemes. With effect from 22 November 2024, the three-year bonus rate will be 0.9%, the five-year bonus rate 2.7, and the early leaver rate 1.17%.