HMRC late payment interest changes

In the October 2024 Budget, the UK government announced an increase in HMRC’s late payment interest rates.

Starting from 6 April 2025, the rate will rise by 1.5 percentage points, pushing the interest on overdue tax to the Bank of England base rate plus 4%.

With current base rates around 5%, this would translate to an approximate 9% interest on late payments.

This change reflects the government’s push for tax compliance and efficient payment collection amidst efforts to address the tax gap and strengthen public finances.

With the increase in the interest, it is even more important we receive your tax returns and accounts information as soon as possible, so we can advise of any liabilities due.