The Bank of England’s Monetary Policy Committee (MPC) met on 2 February 2023 and voted 6-3 in favour of raising interest rates by 50 basis points to 4% in a move to try and continue to tackle upward pressures on inflation. This is the tenth time in a row that the MPC has increased interest rates with rates now the highest they have been since November 2008.
This means that the late payment interest rate applied to the main taxes and duties that HMRC charges interest on increased by 0.5% to 6.50%.
These changes came into effect on:
- 13 February 2023 for quarterly instalment payments
- 21 February 2023 for non-quarterly instalments payments
The repayment interest rates applied to the main taxes and duties that HMRC pays interest on also increased by 0.5% to 3% on 21 February 2023. The repayment rate is set at the Bank Rate minus 1%, with a 0.5% lower limit.