Global Daily Tax News, UK To Cut Tax-Related Interest Rates, (Feb 7, 2025)

HMRC interest rates for late payments will be revised following the Bank of England interest rate cut to 4.5 percent.

The Bank of England Monetary Policy Committee agreed on February 6, 2025, to reduce the Bank of England base rate to 4.5 percent from ...

HMRC interest rates for late payments will be revised following the Bank of England interest rate cut to 4.5 percent.

The Bank of England Monetary Policy Committee agreed on February 6, 2025, to reduce the Bank of England base rate to 4.5 percent from 4.75 percent.

HMRC interest rates are linked to the Bank of England base rate. As a consequence of the change in the base rate, HMRC interest rates for late payment and repayment will fall.

These changes will come into effect on:

February 17, 2025, for quarterly instalment payments; and
February 25, 2025, for non-quarterly instalments payments.

Late payment interest is currently set at base rate plus 2.5 percent. Repayment interest is set at base rate minus 1 percent, with a lower limit - or 'minimum floor' - of 0.5 percent.