Due to the increase in the Bank of England base rate at the beginning of August, HMRC subsequently announced the associated increase in its interest rates. The new rates took effect from Monday 14 August 2023 for quarterly instalment payments, and Tuesday 22 August 2023 for non-quarterly instalments payments.
The two new increased rates of interest are as follows:-
- late payment interest, set at base rate plus 2.5 percent, is now 7.75 percent; and
- repayment interest, set at base rate minus 1 percent, with a lower limit of 0.5 percent (known as the ‘minimum floor’), increased to 4.25 percent.
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