Late payment interest to fall for first time in four years
Late payment interest rates on underpaid taxes will soon decrease due to the recent reduction in the Bank of England’s base rate. What are the new charges?
As HMRC’s late payment and repayment interest rates are linked to the base rate, they will also come down. This will be the first time the interest rates have been lowered since March 2020.
From 12 August 2024 the following rates will apply:
- Late corporation tax paid quarterly – 6%
- Interest on overpaid corporation tax – 4.75%
From 20 August, the rates for other taxes will be:
- Late payment interest – 7.5%
- Interest on overpaid tax – 4%
Whilst the reduction is welcome, the rates are the same as they were this time last year. Ensure all tax payments are made on time to avoid penalty interest.
Related Topics
-
What’s a trivial benefit worth to employers?
The tax and NI exemption for trivial benefits is much misunderstood, but nonetheless very useful to employers. When can you use it, what are its advantages and are there any pitfalls to watch out for?
-
Should you agree to your customer’s self-billing request?
A customer wants to adopt a self-billing system, meaning they will issue invoices on your behalf and charge VAT or otherwise. Can you refuse their request and what are the risks of accepting?
-
Travel expenses - exempt or not?
You have several employees who travel from home or their workplace in the course of doing their job. Naturally, you meet the cost of their travel but should you be deducting tax and NI from the payments, or are they exempt?