HMRC interest rate cut
Following the Bank of England’s cut in its base rate from 0.5% to 0.25% on 4 August, HMRC has decided to cut some of its rates.
Good news. With effect from 23 August 2016, HMRC is cutting the interest rate it charges on late payments from the 3% rate that has been in force since 29 September 2009 to 2.75%. This is because it uses a formula for charging interest of the Bank of England base rate (now 0.25%) plus 2.5%.
More good news. HMRC has confirmed that there is to be no change to the repayment interest rate which will remain at 0.5% - the minimum rate HMRC has set for repayment interest.
Tip : HMRC’s late payment rate is being cut by 0.25% to 2.75% with effect from 23 August 2016. There’s no change to the 0.5% repayment rate.