The
Bank of England’s Monetary Policy Committee (MPC) met on 2 February 2023 and voted 6-3 in favour of raising interest rates by
50 basis points to 4% in a move to try and continue to tackle
upward pressures on inflation. This is the tenth time in a row that the MPC has increased interest rates with rates now the highest they have been since November 2008.
This means that the
late payment interest rate applied to the main taxes and duties that HMRC charges interest on increases by 0.5% to 6.50%.
These changes to late tax payment interest will come into effect on:
13 February 2023 for quarterly instalment payments
21 February 2023 for non-quarterly instalments payments
The repayment interest rates applied to the main taxes and duties that HMRC pays interest on will increase by 0.5% to 3% from 21 February 2023.
The repayment rate is set at the Bank Rate minus 1%, with a 0.5% lower limit.
If you would like to speak with one of our
Private Client Tax advisers about the recent late payment interest rate rise. please Contact a member of our
Private Client Tax Team. Our dedicated Tax Team will be able to give your clear advice on the recent late payment interest rate rise, and strategies to avoid incurring these costs.