HMRC has said two different rates will change, meaning thousands of people could have to pay more
HM Revenue and Customs is set to adjust its interest rates for late payments following the Bank of England's recent decision to lower the base rate. The central bank reduced the base rate from five percent to 4.75 percent, prompting a corresponding decrease in HMRC's rate.
Information on the Government website states: "HMRC interest rates are set in legislation and are linked to the Bank of England base rate. Late payment interest is currently set at base rate plus 2.5 percent. Repayment interest is set at base rate minus 1 percent, with a lower limit - or ‘minimum floor’ - of 0.5 percent."
"The rate of late payment interest encourages prompt payment and ensures fairness for those who pay their tax on time, while the rate of repayment interest fairly compensates taxpayers for loss of use of their money when they overpay." A taxpayer recently reached out to HMRC with difficulties purchasing National Insurance contributions for their state pension.
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