The Bank of England’s Monetary Policy Committee (MPC) met on 15 December 2022 and voted 6-3 in favour of raising interest rates by 50 basis points to 3.5% in a move to try and continue to tackle upward pressures on inflation. This is the ninth time in a row that the MPC has increased interest rates with rates now the highest they have been since November 2008.
Consequently, the late payment interest rate applied to the main taxes and duties that HMRC charges increases by 0.5% to 6.00%.
These changes will come into effect on:
- 26 December 2022 for quarterly instalment payments; and
- 6 January 2023 for non-quarterly instalments payments.
The repayment interest rates applied to the main taxes and duties that HMRC pays interest will increase by 0.5% to 2.5% from 26 December 2022. The repayment rate is set at the Bank Rate minus 1%, with a 0.5% lower limit.