Late payment interest rates changed again

On 6 February 2025 an announcement confirmed a reduction in the Bank of England base rate to 4.5% from 4.75%. As HMRC’s late payment and repayment interest rates are linked to the base rate, they will also come down.

From 17 February 2025 the following rates will apply:

• Late corporation tax paid quarterly – 5.5%
• Interest on overpaid corporation tax – 4.25%

From 25 February 2025, the rates for other taxes will be:

• Late payment interest – 7%
• Interest on overpaid tax – 3.5%

Penalty interest can be avoided by paying your tax bill on time. You can use HMRC's calculator to calculate the late payment interest and any penalties due for previous tax years.