HMRC has increased the late payment interest applied to the main taxes and duties to 3.50%.

These changes will come into effect on 24 May 2022 for Corporation Tax non-quarterly instalment payments, Income Tax, National Insurance contributions, Capital Gains Tax, Stamp Duty Land Tax and Stamp Duty Reserve Tax. The rate last increased to 3.25% on 5 April 2022.

In addition, the late payment interest applied to Corporation Tax quarterly instalment payments will increase from 1.75% to 2% with effect from 16 May 2022.

This increase has been instigated by the Bank of England base rate increase from 0.75% to 1% in May 2022.

The repayment interest rate remains unchanged at 0.5%, and has remained fixed at that rate since 29 September 2009. Repayment interest will continue to be paid at 0.5% until the Bank of England raises the base rate above 1.5%. Then it will increase with the base rate.