Late payment interest rates changed again
Late payment interest rates on underpaid taxes will soon decrease again due to the recent reduction in the Bank of England’s base rate. What are the new charges?
On 6 February 2025 an announcement confirmed a reduction in the Bank of England base rate to 4.5% from 4.75%. As HMRC’s late payment and repayment interest rates are linked to the base rate, they will also come down.
From 17 February 2025 the following rates will apply:
- Late corporation tax paid quarterly – 5.5%
- Interest on overpaid corporation tax – 4.25%
From 25 February 2025, the rates for other taxes will be:
- Late payment interest – 7%
- Interest on overpaid tax – 3.5%
Penalty interest can be avoided by paying your tax bill on time. You can use HMRC's calculator to calculate the late payment interest and any penalties due for previous tax years.
Related Topics
-
Practical guide: Tax-efficient will planning with residential property
An individual has a significant property portfolio which provides them with their sole source of income. They want to gift shares in some property to their daughter but retain the income. Can they do this without triggering the reservation of benefit rules?
-
Will HMRC treat late processed invoices as errors?
Your business processes invoices when they have been approved by budget holders, so some will be processed a month late, delaying your input tax claim. How might HMRC’s updated guidance help here?
-
Are redundancy payments tax deductible?
A seemingly simple question we’re often asked is how much tax relief a business is entitled to for redundancy payments. The answer is that it depends on the situation. How might the circumstances of a redundancy affect the tax deduction?