UK tax authority to raise interest rates on late payments

The revised rates will apply from 16 November to quarterly instalments and from 24 November to other instalments.

HMRC will raise interest rates on late tax payments and repayments after the Bank of England increased its base rate to 4%. The changes take effect on 16 and 24 November.

Author: Робот Source: HM Revenue and Customs of the United Kingdom

The Bank of England building in London. — HMRC is updating its interest rates following the Bank of England base rate increase. Illustrative photo. Photo: Diliff / Wikimedia Commons, CC BY-SA 3.0

HM Revenue and Customs (HMRC) will raise interest rates for late tax payments and repayments following the Bank of England’s increase in its base rate from 3.75% to 4.00%.

The Bank of England Monetary Policy Committee announced the increase on 5 November 2026. HMRC interest rates are linked to the Bank of England base rate.

The changes will take effect on 16 November 2026 for quarterly instalment payments and on 24 November for non-quarterly instalment payments. Information on payment interest rates will be updated shortly.

Late payment interest is currently set at the base rate plus 4 percentage points. Repayment interest is set at the base rate minus 1 percentage point, with a minimum rate of 0.5%.

HMRC said the difference between the rates is in line with the approach of tax authorities worldwide and compares favourably with commercial interest charged on loans and overdrafts and paid on deposits. Late payment interest encourages prompt tax payments, while repayment interest compensates taxpayers when they have overpaid.

Source: HM Revenue and Customs of the United Kingdom

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United Kingdom

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UK tax authority to raise interest rates on late payments

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