HMRC interest rates are linked to the Bank of England base rate, and the increase in early August from 1.25% to 1.75% has triggered another increase in rates for late payments.
This takes effect from 15 August 2022 for late quarterly instalment payments, and late payment interest for other late payments will increase from 23 August 2022.
The rate of interest on unpaid instalments of corporation tax liabilities is calculated as base rate plus one. It will increase to 2.75% from 15 August 2022.
The rate of interest for the late payment of other taxes is calculated as base rate plus 2.5, so will increase to 4.25% from 23 August 2022.
The rate of interest paid by HMRC on the overpayment of tax will also increase to 0.75% on 23 August 2022.
