HMRC has reduced late payment and repayment interest rates following the cut to the base rate.
The Bank of England cut the base rate to 4.75% on 7 November, the second reduction this year.
This has triggered a cut in HMRC interest rates which are pegged to the base rate.
From 26 November, the late payment interest rate was cut to 7.25% from 7.5%. The repayment interest rate was also reduced to 3.75% from 4.0% from 26 November.
HMRC late payment interest is set at base rate plus 2.5%. Repayment interest is set at base rate minus 1%, with a lower limit – or ‘minimum floor’ – of 0.5%.
Corporation tax self assessment interest rates relating to interest charged on underpaid quarterly instalment payments dropped to 5.75% from 6.0% from 18 November.
The interest paid on overpaid quarterly instalment payments and on early payments of corporation tax not due by instalments is down by 0.25% to 4.5% from 5% from 18 November.
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