Bank of England and HMRC increase interest rates

The Bank of England’s Monetary Policy Committee (MPC) met on 22 March 2023 and voted 7-2 in favour of raising interest rates by 25 basis points to 4.25% in a move to tackle continued, rising inflation. This is the eleventh time 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 increases by 0.25% to 6.75%.

These changes will come into effect on:

• 3 April 2023 for quarterly instalment payments
• 13 April 2023 for non-quarterly instalments payments

The HMRC repayment interest rates applied to the main taxes and duties will increase by 0.25% to 3.25% from 13 April 2023. The repayment rate is set at the Bank Rate minus 1%, with a 0.5% lower limit.