Late payment interest rates changed again
Late payment interest rates on underpaid taxes will soon decrease again due to the recent reduction in the Bank of England’s base rate. What are the new charges?
On 6 February 2025 an announcement confirmed a reduction in the Bank of England base rate to 4.5% from 4.75%. As HMRC’s late payment and repayment interest rates are linked to the base rate, they will also come down.
From 17 February 2025 the following rates will apply:
- Late corporation tax paid quarterly – 5.5%
- Interest on overpaid corporation tax – 4.25%
From 25 February 2025, the rates for other taxes will be:
- Late payment interest – 7%
- Interest on overpaid tax – 3.5%
Penalty interest can be avoided by paying your tax bill on time. You can use HMRC's calculator to calculate the late payment interest and any penalties due for previous tax years.
Related Topics
-
Timetable for agent multi-factor authentication rollout published
HMRC has published further details of its plans to introduce multi-factor authentication (MFA) for tax agents. The rollout is intended to strengthen security across HMRC's online services and will be introduced in stages over the coming months. What do you need to know?
-
HMRC clarifies treatment of averaging relief under MTD IT
HMRC has updated its guidance to explain how averaging relief claims will operate under Making Tax Digital for Income Tax (MTD IT). The clarification addresses concerns about how farmers and creators will claim relief once quarterly reporting becomes mandatory. What has changed?
-
VAT cut for children's holiday activities over summer
The government has announced a temporary reduction in the rate of VAT applying to certain children's holiday activity programmes during the summer holidays. The measure is intended to help families with childcare costs during the school break. What has changed?
This website uses both its own and third-party cookies to analyze our services and navigation on our website in order to improve its contents (analytical purposes: measure visits and sources of web traffic). The legal basis is the consent of the user, except in the case of basic cookies, which are essential to navigate this website.