Following a trend of rising inflation, which is forecast to hit six percent in by next Spring, the Bank of England raised interest rates last week.
The rate rise, the first since March 2020, increases the base borrowing rate from 0.1 percent to 0.25 percent. A 0.15 percent difference. The 0.1 percent rate was already the lowest in history after being slashed in an emergency meeting in the early days of the pandemic.
Prior to the 'early pandemic slash' the base rate had been held at 0.75 percent for two years.
HMRC interest rates are now due to be revised as they are linked to the Bank of England base rate. HMRC interest rates are used when calculating interest on for example, instalments and late payments.
The current HMRC late payment interest rate is 2.6 percent.
The current HMRC repayment interest rate is 0.5 percent.
Interest charged on underpaid quarterly corporation tax payments is currently 1.10 percent, whereas interest paid on overpayments is 0.5 percent.
The full table of HMRC interest rates is available at https://www.gov.uk/government/publications/rates-and-allowances-hmrc-interest-rates-for-late-and-early-payments/rates-and-allowances-hmrc-interest-rates, which will be updated shortly.
People making quarterly instalments will see rates updated from December 27th 2021, with other rates adjusted from January 4th 2022.