The Bank of England’s Monetary Policy Committee (MPC) met on 21 June 2023 and voted 7-2 in favour of raising interest rates by 50 basis points to 5% to continue to tackle inflation. The 2 remaining members voted to keep the rate at 4.5%. This is the thirteenth consecutive time that the MPC has increased interest rates with rates now the highest they have been since 2008.
This means that the late payment interest rate applied to the main taxes and duties that HMRC charges interest on increases by 0.5% to 7.5%.
These changes will come into effect on:
- 3 July 2023 for quarterly instalment payments
- 11 July 2023 for non-quarterly instalments payments
The repayment interest rates applied to the main taxes and duties that HMRC pays interest on will increase by 0.5% to 4% from 30 June 2023. The repayment rate is set at the Bank Rate minus 1%, with a 0.5% lower limit.