Interest rates increased for late paid tax

HMRC is increasing interest rates for late payments for most taxes after the Bank of England’s decision to increase the base rate to 1% from 0.75%.

The rate for late paid corporation tax quarterly instalment payments becomes 2% and takes effect from 16 May 2022. The new rate for other late paid taxes is 3.5% and takes effect from 24 May 2022.

The repayment interest rate is unchanged at 0.5% except for interest paid on overpaid quarterly instalment payments and on early payments of corporation tax not due by instalments which increases to 0.75% from 16 May 2022.

Nimesh Shah chief executive officer at Blick Rothenberg said: ‘The increase to HMRC interest on late paid tax is a warning to everyone who is not up-to-date on their tax payments. The cost can become very expensive very quickly. Someone that owes £5 000 to HMRC now...