PENALTY INTEREST
On 6 February 2025 the Bank of England base rate was cut 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.
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. Use HMRC’s calculator to calculate the late payment interest and any penalties due for previous tax years.