UK tax interest rates rise from 16 and 24 November

For the main taxes and duties in HMRC’s schedule—including Income Tax, National Insurance contributions, Capital Gains Tax, Stamp Duty Land Tax, VAT for periods beginning on or after 1 January 2023, Alcohol Duty and Vaping Product Duty—the late-payment rate will increase from 7.75% to 8.00% and repayment interest from 2.75% to 3.00% on 24 November. HMRC’s table applies the same pair to Corporation Tax pay-and-file and other listed regimes from that date.^[1][2]

Quarterly-instalment rates change earlier

For Corporation Tax Self Assessment instalments, the rate on underpaid quarterly instalments becomes 6.50% from 16 November. Interest paid on overpaid quarterly instalments and early Corporation Tax payments not due by instalments becomes 3.75%. The update is an automatic consequence of Bank Rate rather than a new tax charge or discretionary penalty.^[1][2][6]

Existing statutory formula

Regulation 2 of the Taxes and Duties, etc (Interest Rate) Regulations 2011 defines the operative date by reference to the latest Bank of England Monetary Policy Committee meeting. Regulations 3 and 4 apply Bank Rate plus four percentage points to late-payment interest and the higher of Bank Rate minus one point or 0.5% to repayment interest. At a 4% Bank Rate, those formulas produce 8% and 3%; HMRC’s announced 24 November date is the operative date for the general rates.^[3][4][5][6]

Apply the correct date and category

Taxpayers with outstanding balances, expected refunds or Corporation Tax instalments should update cash forecasts and interest calculations for the relevant start date. The change does not alter tax due dates, principal liabilities or commercial-debt interest. Nor does every category change on the same date: use HMRC’s table for the specific tax and payment type and preserve the earlier rate for periods before the applicable start date. Special regimes not expressly covered by the cited table should be checked separately.^[1][2]