The Bank of England Monetary Policy Committee announced on 7 August 2025 to reduce the Bank of England base rate to 4.00% from 4.25%.

HMRC interest rates are linked to the Bank of England base rate.

As a consequence of the change in the base rate, HMRC interest rates for late payment and repayment will reduce.

These changes will come into effect on:

18 August 2025 for quarterly instalment payments

27 August 2025 for non-quarterly instalments payments

Information on the interest rates for payments will be updated shortly.

How HMRC interest rates are set

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

Late payment interest is currently set at base rate plus 4.00%. Repayment interest is set at base rate minus 1%, with a lower

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