Published: 24/08/2022 By Hannah McCormackFollowing our last blog regarding the bank of England’s decision to raise interest rates to 1.75% (read it here); HMRC have announced they will also be raising interest rates on late payments.
4.25% will be the new late payment interest rate as of yesterday 23rd August which is the highest rate since the financial crisis in 2009, it is an increase from the previous rate of 3.75%.
Tax payers should ensure their bills are paid on time to avoid the new hike in charges for any late payments especially given the current financial climate. Anyone who already has an amount outstanding should pay off as much as possible to avoid further higher charges of interest occurring.
The new amount of interest is charged on any late tax bills including Income Tax, National Insurance contributions, Capital Gains Tax, and Stamp Duty Land and Reserve tax as well as Corporation Tax non-quarterly instalment payments.
As well as the interest charged to the taxpayer HMRC will also increase the repayment interest from 0.5% to 0.75%
Please get in touch if you have any questions regarding anything to your tax.