HMRC will reduce late payment and repayment interest rates from 27 August, following the 0.25% cut in the base rate earlier in the month.

The Bank of England cut the base rate to 4% on 7 August, triggering a 0.25% cut in HMRC interest rates, which are pegged to the base rate.

From 27 August, the late payment interest rate will be cut to 8.0% from 8.25%.

The repayment interest rate will be cut to 3% from 3.25% from 27 August.

HMRC late payment interest is set at base rate plus 4%. Repayment interest is set at base rate minus 1%, with a lower limit – or ‘minimum floor’ – of 0.5%.

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