HM Revenue & Customs (HMRC) has announced a reduction in interest rates for late payments and repayments, in line with the Bank of England’s decision to cut its base rate to 4.25%.
As of 8 May 2025, the Bank of England Monetary Policy Committee reduced the base rate from 4.50% to 4.25%. This change will lead to a decrease in HMRC’s interest rates for both late payments and repayments.
The revised interest rates will take effect from:
- 19 May 2025 for quarterly instalment payments
- 28 May 2025 for non-quarterly instalments
Currently, late payment interest is set at base rate plus 4.00%, while repayment interest is base rate minus 1%, with a minimum of 0.5%. These adjustments are designed to encourage timely payments while fairly compensating taxpayers for overpayments.
Stay updated on these changes as more information becomes available on the official HMRC website.
Disclaimer: This article is intended for informational purposes only and does not constitute legal or tax advice.