he Bank of England Monetary Policy Committee recently voted to increase the Bank of England base rate to 1.75% from 1.25%. HMRC interest rates are linked to the Bank of England base rate.
As a consequence of the change in the base rate, HMRC interest rates for the late payment will increase.
These changes will come into effect on 23 August. The changers are:
Default interest (payable by the taxpayer) increases from 3.75% to 4.25%. This is set at base rate plus 2.5%
Statutory interest (payable to the taxpayer) increases from 0.5% to 0.75%. This is set at base rate minus 1%, with a lower limit of 0.5% (known as the ‘minimum floor’). To note this is the first increase since 29 September 2009. This change will also impact the new interest regime applying from January.
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