The UK's HMRC has announced that its interest rates for late payments will be revised following the Bank of England's recent interest rate hike. On 5 November 2026, the Bank of England increased its base rate to 4.00% from 3.75%. Since HMRC interest rates are linked to this base rate, the changes will affect both late payment and repayment interest rates.
The new rates will take effect on 16 November 2026 for quarterly instalment payments and on 24 November 2026 for non-quarterly instalments. The exact updated rates will be published shortly.
Currently, late payment interest is set at the base rate plus 4%, while repayment interest is set at the base rate minus 1%, with a minimum floor of 0.5%. These rates are designed to encourage timely tax payments and fairly compensate taxpayers for overpayments.