HMRC will raise interest rates on tax debt from 11 October following the 0.5% increase in the base rate.
This means that the late payment interest rate will increase to 4.75% from 11 October 2022. The rate last increased to 4.25% on 23 August. This is the highest rate since the height of the financial crisis in January 2009.
Late payment interest is payable on late tax bills covering income tax, national insurance contributions (NICs), capital gains tax (CGT), Stamp Duty Land Tax (SDLT) and stamp duty reserve tax (SDRT). The corporation tax self assessment rate also increases to 4.75%.
The repayment interest rate will also be increased from the current 0.75% repayment interest rate to 1.25%.
Corporation tax self assessment interest rates relating to interest charged on underpaid quarterly instalment payments rise to 3.25%, up from 2.75% from 3 October 2022 (with the higher rate above applying from the normal due date).
The interest paid on overpaid quarterly instalment payments and on early payments of corporation tax not due by instalments rises to 2% from 1.5% from 3 October 2022.