Following the recent decision to increase the Bank of England base rate to 4.25%, HMRC has announced increases to both the interest charged on late paid tax and the rate paid on repayments of tax.
As HMRC interest rates are linked to the Bank of England base rate, the 23 March 2023 increase from 4% to 4.25% has triggered another increase in rates for late payments and repayment of tax.
HMRC has announced that the rate will increase with effect from 3 April 2023 for late quarterly instalment payments. Late payment interest for other late payments will increase from 13 April 2023.
The rate of interest on unpaid instalments of corporation tax liabilities is calculated as base rate plus one. It will increase to 5.25% from 3 April 2023.
It would appear that a further rate rise is on the cards in May 2023 too so we can expect rates to rise again!
