Late payment interest rates witness a rise by HMRC
The interest rates of HMRC and base rates of the Bank of England are linked to each other, and hence on 16th December 2021, the increase in the base rate from 0.1% to 0.25% has resulted in an increase in rates for delayed payments.
On December 27th, 2021 this rate increased from 1.1% to 1.25% for quarterly instalment payments. In 2022, from 4th January onwards, the late payment interest for other payments has seen a rise from 2.6% to 2.75%. There seems no change in the rate of interest paid by HMRC which is 0.5% as this rate is calculated as the higher of:
- 5%; and
- the Bank of England base rate minus one.