HMRC will raise interest rates on tax debt to 6.5% from 21 February following latest increase in base rate
The late payment and repayment interest rates applied to the main taxes and duties that HMRC currently charges and pays interest on will rise to:
- late payment interest rate — 6.5% from 21 February 2023
- repayment interest rate — 3% from 21 February 2023
This means that the late payment interest rate will increase by 0.5% to 6.5% from 21 February. The rate last increased to 6% on on 6 January. This is the highest rate since the start of the financial crisis in November 2008.
Late payment interest is payable on late tax bills covering income tax, National Insurance contributions, capital gain tax, stamp duty land tax, stamp duty and stamp duty reserve tax. The corporation tax pay and file rate also increases to 6%.
Repayment interest will also be increased from the current 2.5% rate to 3%.
Corporation tax self assessment interest rates relating to interest charged on underpaid quarterly instalment payments rises to 5%.
The interest paid on overpaid quarterly instalment payments and on early payments of corporation tax not due by instalments rises to 3.75%.