Interest Rates for Late and Overpaid Taxes - Increase effective 6 January 2009

Written by Ian Congreave - Filed under: Interest Rates on December 29th, 2008

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Interest is charged by HMRC when income tax and NICs are paid late, and credited when they are overpaid. New interest rates have been announced and take effect from 6 January 2009.

Following the further reduction in the Bank of England base rate on 4 December, from 3% to 2%, the rate of interest charged on income tax and NICs paid late decreases from 5½% to 4½%. The rate paid on overpaid tax and NICs reduces from 1½% to 0¾%.

HMRC has also introduced legislation that

allows changes to interest rates to be made 13 days after the meeting of the Bank of England Monetary Policy Committee, and
prevents HMRC interest rates falling below zero.

Further information:
HM Revenue & Customs interest rates
The Taxes and Duties (Interest Rate) (Amendment) Regulations 2008
Explanatory Memorandum to the Taxes and Duties (Interest Rate) (Amendment) Regulations 2008

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Written by Ian Congreave -

Filed under: Interest Rates on December 29th, 2008