HMRC to reduce interest rates

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The Bank of England’s Monetary Policy Committee (MPC) met on 1 August 2024 and voted 5-4 in favour of reducing interest rates by 25 basis points to 5%. This was the Bank of England's first interest rate cut since March 2020.

This means that the late payment interest rate applied to the main taxes and duties that HMRC charges will be reduced from 7.75% to 7.5%.

These changes will come into effect on:

12 August 2024 for quarterly instalment payments; and
20 August 2024 for non-quarterly instalments payments.

The repayment interest rates applied to the main taxes and duties that HMRC pays interest on will also decrease by 0.25% to 4% from 20 August 2024. The repayment rate is set at the Bank Rate minus 1%, with a 0.5% lower limit.