HMRC increase interest rates

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HMRC increase interest rates

Following the latest increase in the Bank of England base rate to 1.75%, HMRC will raise interest rates on late tax bills by 0.5%.

This means that the late payment interest rate will increase to 4.25% from 23 August 2022. The rate last increased to 3.75% on 5 July. This is the highest rate since the height of the financial crisis in January 2009.

Late payment interest is payable on late tax bills covering income tax, National Insurance contributions, capital gain tax, stamp duty land tax, stamp duty and stamp duty reserve tax. The corporation tax pay and file rate also increases to 4.25%.

HMRC are also increasing interest paid to taxpayers on overpayments. This is the first rise since 29th September 2009 but they are only raising the rate by 0.25% to point 0.75% which contrasts with their increase in monies due to them of 0.5%.

However, interest paid on corporation tax paid before the due date rises to 1.5% which is significantly better than the rate which can be obtained from most banks!

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