Following the reduction in the Bank of England base rate, HM Revenue & Customs (HMRC) have confirmed that their interest rates will be reduced accordingly.
Late payment interest will reduce to 7% from 7.25%. Repayment interest – paid on tax repayments – will be reduced to 3.5%.
The change will come into effect from:
-17 February 2025 for quarterly instalment payments.
-25 February 2025 for non-quarterly instalments payments.
See: https://www.gov.uk/government/news/hmrc-late-payment-interest-rates-to-be-revised-after-bank-of-england-lowers-base-rate--2
The latest Budget was packed with policy announcements, but according to the Office for Budget Responsibility (OBR), these policies will not really change the UK’s growth outlook over the next five years.
With the festive season underway and household budgets feeling the pressure, it may be useful to know that if you are worried about paying your tax bill in one lump sum, you may be able to spread the cost.