The Bank of England’s Monetary Policy Committee (MPC) met on 10 May 2023 and voted 7-2 in favour of raising interest rates by 25 basis points to 4.5% in a move to try and continue to tackle continued inflation. This is the twelfth consecutive time that the MPC has increased interest rates with rates now the highest they have been since 2008.
This means that the late payment interest rate applied to the main taxes and duties that HMRC charges will increase by 0.25% to 7%.
These changes will come into effect on:
- 22 May 2023 for quarterly instalment payments; and
- 31 May 2023 for non-quarterly instalments payments.
The repayment interest rates applied to the main taxes and duties that HMRC pays interest on will increase by 0.25% to 3.5% from 31 May 2023. The repayment rate is set at the Bank Rate minus 1%, with a 0.5% lower limit.