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

Written by Ian Congreave - Filed under: Interest Rates on February 2nd, 2009

Hi! If you're new here, you might want to register for free email updates. Just use the form at the top of the sidebar. Thanks for visiting The Payroll Blog!

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 27 January 2009. This is the first change of rates to occur since Regulations were made in December allowing HMRC to amend rates more quickly following movements in market rates. The amended legislation provides for these rates to come into effect 13 working days after the meeting of the Monetary Policy Committee of the Bank of England.

Following the further reduction in the Bank of England base rate on 8 January, from 2% to 1 ½%, the rate of interest charged on income tax and NICs paid late decreases from 4½% to 3½%. The rate paid on overpaid tax and NICs reduces from 0¾% to 0%. The December Regulations also prevent HMRC interest rates falling below zero.

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

The UK Payroll News is sponsored by HRD & Payroll Solutions

Written by Ian Congreave -

Filed under: Interest Rates on February 2nd, 2009