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Manchester Accountants News Blog - Late payment interest rates changed again - Dunhams News Blogs

Late payment interest rates changed again


Posted on: 17-02-2025

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.

Get more help from our Business Tax Services page.

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.

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