The interest charged to those making late tax payments has increased from 3% to 3.25%. Interestingly, the amount of interest that HMRC pays on top of refunds owed to taxpayers remains the same at 0.5%. The interest rate for repayments has been at 0.5% since 2009.
The accountancy body ACCA says it is “simply unfair” that people owing tax have seen a rise in the interest they pay, yet those owed a refund will see no change. Chas Roy-Chowdhury, the head of taxation at ACCA goes on to add that it should be a “level playing field” and that HMRC should have made the same change to the rate it charges and the rate it pays.
However, a spokesperson for HMRC has a different view, saying “the different interest rates provide fairness to taxpayers who pay on time. Most people pay their tax on time and it is only right that those who don’t, pay a higher rate of interest on the unpaid tax that would otherwise have gone to our schools, hospitals and other vital public services.”
The table below shows how Income Tax, National Insurance contributions, Capital Gains Tax, Stamp Duty Land Tax, Stamp Duty and Stamp Duty Reserve Tax has changed over time:
From |
Late payment % |
Repayment % |
|
21 August 2018 |
3.25 | 0.50 |
|
21 November 2017 |
3.00 |
0.50 |
| 23 August 2016 | 2.75 |
0.50 |
|
29 September 2009 |
3.00 |
0.50 |
|
24 March 2009 |
1.75 |
0 |
|
27 January 2009 |
2.75 |
0 |
|
6 January 2009 |
3.50 |
0.50 |
|
6 December 2008 |
4.25 |
1.25 |
|
6 November 2008 |
5.00 |
2.00 |
|
6 January 2008 |
6.00 |
2.75 |
|
6 August 2007 |
6.75 |
3.50 |
|
6 September 2006 |
6.00 |
2.75 |
|
6 September 2005 |
5.25 |
2.00 |
|
6 September 2004 |
6.00 |
2.75 |
|
6 December 2003 |
5.25 |
2.00 |
|
6 August 2003 |
4.25 |
1.25 |
|
6 November 2001 |
5.00 |
2.00 |
|
6 May 2001 |
6.00 |
2.75 |
|
6 February 2000 |
6.75 |
3.50 |
|
6 November 2001 |
5.00 |
2.00 |
|
6 May 2001 |
6.00 |
2.75 |
|
6 February 2000 |
6.75 |
3.50 |
To see the source of this information and more HMRC interest rates for late and early payments, please visit: https://www.gov.uk/government/publications/rates-and-allowances-hmrc-interest-rates-for-late-and-early-payments/rates-and-allowances-hmrc-interest-rates
