HM Revenue & Customs interest rates

HM Revenue & Customs (HMRC) announce their latest interest rates charged on late payments and paid on overpayments. These rate changes are made as advised in the announcement of 29 July 2009 on harmonising interest rates across all taxes.

The rate changes announced today are:

an increase to the repayment rate for quarterly instalment payments and early payments of Corporation Tax (CT) not due by instalments (for accounting periods ending on or after 1 July 1999) which take effect from 21 September 2009
an increase in both the late payment and overpayment rates of interest for all other taxes and National Insurance contributions (NICs) which take effect from 29 September 2009

Details of rate changes

Tax/Duty	Late payments current rate	Late payments new rate	Over payments current rate	Over payments new rate	With effect from
Income Tax, NICs, Capital Gains Tax, Stamp Duties	2.5	3.0	0.0	0.5	29 September 2009
VAT, Excise Duties, Environmental Taxes, Insurance Premium Tax and Custom Duty (* Default interest ** Statutory interest)	2.5	3.0	0.0	**0.5	29 September 2009
CT Quarterly Instalment Payments (QIPs)	1.5	1.5	0.25	0.5	21 September 2009 2009
CT for account period ending on or after 1 October 1993 (under CT Pay & File)	1.75	3.0	0.0	0.5	29 September 2009
CT(other than underpaid CT instalments) for account period ending on or after 1 July 1999	2.5	3.0	0.0	0.5	29 September 2009
Income Tax on company payments that became due on or after 14 October 1999	2.5	3.0	N/A	0.5	29 September 2009
Inheritance Tax, Capital Transfer Tax and Estate Duty	0.0	3.0	0.0	0.5	29 September 2009
Advance CT, CT on or before 30 September 1993 (that is (pre CT pay & file)), Stamp Duty Reserve Tax (to 30 September 1999), Petroleum Revenue Taxes and Income Tax on company payments due on or before 13 October 1999.	2.0	3.0	2.0	0.5	29 September 2009

Background

Section 178 of the Finance Act 1989 and the Taxes (Interest Rate) Regulations 1989 (S.I. 1989/1297) lay down the procedures and formulae for calculating and amending HMRC interest rates that apply to direct taxes and NICs.

Section 197 Finance Act 1996 rate and the Air Passenger Duty and Other Indirect Taxes (Interest Rate) Regulations 1998 (S.I. 1998/1461) lay down the procedures and formulae for calculating and amending HMRC interest rates that apply to indirect taxes.

These Regulations were recently amended in order to reduce the time taken to change the majority of the rates, to harmonise the rates across all taxes, to introduce a floor for repayment interest, and to apply new formulae to calculate rates.

Section 37 Tax Credits Act 2002 and the Tax Credits (Interest Rate) Regulations 2003 (SI 2003/123) lay down the procedures and formula for calculating and charging interest on certain overpayments of Tax Credits.

The revised interest rates are based on the base lending rate of 0.5 per cent, calculated in accordance with the relevant Regulations.

Information on the rates charged and paid by HMRC can be found at Departmental interest rates