Following the reduction in the Bank of England base rate, HM Revenue & Customs (HMRC) have confirmed that their interest rates will be reduced accordingly.


Late payment interest will reduce to 7% from 7.25%. Repayment interest – paid on tax repayments – will be reduced to 3.5%.


The change will come into effect from:


-17 February 2025 for quarterly instalment payments.


-25 February 2025 for non-quarterly instalments payments.


See: https://www.gov.uk/government/news/hmrc-late-payment-interest-rates-to-be-revised-after-bank-of-england-lowers-base-rate--2