HMRC late payments interest rates to increase

The HMRC interest rates for late payments will be increased by 1.5% for all taxes from 6 April 2025 following a change in legislation.

This increase was announced at Autumn Budget 2024 and the change will take effect from 6 April 2025.

HMRC interest rates are set in legislation and are linked to the Bank of England base rate. 

There are 2 rates:

• late payment interest set at base rate plus 4% from 6 April 2025 (was plus 2.5% on or before 5 April 2025)
• repayment interest, set at base rate minus 1%, with a lower limit of 0.5% (known as the ‘minimum floor’)

The current late payment and repayment interest rates applied to the main taxes and duties that HMRC currently charges and pays interest on are:

• late payment interest rate – 8.5% from 6 April 2025
• repayment interest rate – 3.50% from 25 February 2025

For further information please select the following links: 

• HMRC late payments interest rates to increase from 6 April 2025 - GOV.UK
• HMRC interest rates for late and early payments - GOV.UK