Following the Bank of England’s announcement on 5 November 2026 that the base rate would increase to 4.00%, HMRC's interest rates will also increase by 0.25 percentage points. From 24 November 2026, the late payment interest rate will rise to 8.00% and the repayment interest rate to 3.00%.
The rates apply to the main taxes and duties administered by HMRC and are linked to the Bank of England base rate.
Since 6 April 2025, the late payment interest rate has been set at four percentage points above the base rate. The repayment interest rate is set at one percentage point below the base rate, subject to a minimum rate of 0.5%.
- For companies within the Corporation Tax quarterly instalment payment regime, the rate of interest on underpaid instalments will increase from 6.25% to 6.50%. The repayment interest rate will increase from 3.50% to 3.75%. These changes take effect from 16 November 2026.
- For all other payments, the late payment interest rate will increase to 8.00% and the repayment interest rate to 3.00% from 24 November 2026.
The Official rate of interest, most commonly associated with Employment-related loans for tax purposes, currently stands at 3.75%.
- Since 6 April 2025, this rate is reviewed quarterly, with any changes implemented following the review where appropriate.
- Any in-year changes take effect on 6 July, 6 October and 6 January.
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.
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