Interest rates rise to the highest level since 2009

The Bank of England raised interest rates by a quarter of a percentage point this month, taking its base interest rate up to one per cent.

That is the highest interest rates have been since 2009 and was the Bank’s fourth rise in a row.

The rise will leave many homeowners struggling to meet their monthly mortgage repayments, meaning it is a worrying time for many people.

However, it is not only homeowners who stand to be affected by the rise.

Because of the interest rate rise, HMRC’s late payment interest rates have also been revised following the Bank of England’s move.

HMRC interest rates are linked to the Bank of England base rate. As a result, HMRC interest rates for late payments will increase.

When did these changes take effect?

  • 16 May 2022 for quarterly instalment payments
  • 24 May 2022 for non-quarterly instalments payments

Late payment interest will be at the base rate, plus 2.5 per cent.

HMRC says that the late payment interest rate encourages “prompt payment” and creates “fairness for those who pay their tax on time.”

According to HMRC, more detailed information on the interest rates for payments will be published shortly.

Meanwhile, the increase in the late payment interest rate serves as another reminder of the importance of submitting tax returns and payments to HMRC on time.

For advice on tax services and related matters, please contact us.