Following the decision by the Bank of England to increase the base rate, HMRC has confirmed that the late payment interest rate rose a quarter of a per cent.

The increase applies from 14 February 2022 for quarterly instalment payments and from 21 February 2022 for non-quarterly instalment payments.

On 2 February 2022, the Bank’s Monetary Policy Committee (MPC) increased the base rate to 0.5%.

As HMRC interest rates are linked to the Bank of England base rate, the increase in the base rate from 0.25% to 0.5% triggered an increase in rates for late payments.

On 4 February 2022, HMRC announced that the current late payment interest rate applied to the main taxes and duties would rise to 3% from 2.75%, effective from 21 February 2022.

The 3% rate is applied to late payments for income tax, national insurance contributions (NICs), capital gains tax (CGT), stamp duty land tax (SDLT), stamp duty and stamp duty reserve tax.

The corporation tax pay and file rate will also rise to 3% for late payments, while the repayment rate remains at 0.5%.

If you would any advice about late payments, please contact us. You can call us on 0115 928 3228 or email info@coalesco.co.uk.