Following the Bank of England’s announcement on 7 November 2024 that the base rate would decrease to 4.75%, HMRC's interest rates are also decreasing by 0.25%, to 7.25% for late payment interest and 3.75% for repayment interest, from 26 November 2024.
The rates, which apply to the main taxes and duties administered by HMRC, track the Bank of England base rate. The late payment rate is set at 2.5% above the base rate. The repayment rate is set at the base rate minus 1% with a 'minimum floor' of 0.5%.
- For companies in the Corporation Tax quarterly instalment payment regime, the rate of interest on underpaid instalment payments decreases to 5.75% from 6%. Repayment interest falls to 4.5% from 4.75%. These changes take effect from 18 November 2024.
- For all other payments, the decrease to 7.25% takes effect from 26 November 2024, as does the fall in the repayment interest rate to 3.75%.
- The Official rate of interest which is most commonly seen in relation to Employment-related loans, has been set at 2.25% for 2024-25.
Editorial note
The benefit from this reduction in rates may be short-lived. It was announced at the 2024 Autumn Budget that from 6 April 2025, the late payment interest rate charged on unpaid tax liabilities would Increase by 1.5 percentage points.
Useful guides on this topic
Penalties: Late Payment
What penalties are charged when tax is paid late?
Penalties: Late Payment MTD
Penalties for late payment of tax under Making Tax Digital for VAT and Income Tax.
External link
HMRC late payment interest rates to be revised after Bank of England lowers base rate
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