The Bank of England Monetary Policy Committee announced on 23 March 2023 to increase the Bank of England base rate to 4.25% from 4%.
HMRC interest rates are set in legislation and are linked to the Bank of England base rate.
As a consequence of the change in the base rate, HMRC interest rates for late payment and repayment will increase.
These changes will come into effect on:
3 April 2023 for quarterly instalment payments, and
13 April 2023 for non-quarterly instalments payments.
Late payment interest is set at base rate plus 2.5%. Repayment interest is set at base rate minus 1%, with a lower limit – or ‘minimum floor’ – of 0.5%.