HMRC will reduce late payment and repayment interest rates from 28 May following
the 0.25% cut in the base rate earlier in the month.
The Bank of England cut the base rate to 4.25% on 8 May, triggering a 0.25% cut
in HMRC interest rates which are pegged to the base rate.
From 28 May, the late payment interest rate will be cut to 8.25% from 8.5%, which
was the highest rate charged since February 2000.
The repayment interest rate will be cut to 3.25% from 3.5% from 28 May.
HMRC late payment interest is set at base rate plus 4%. Repayment interest is set
at base rate minus 1%, with a lower limit - or 'minimum floor' - of 0.5%.
Following the cut to the base rate David Bharier, Head of Research at the British
Chambers of Commerce said:
'Many firms, desperate for financial respite, will be keen to see further
rate cuts in the months ahead.
'National insurance hikes, alongside other cost pressures, are already having
an impact, including increased prices, hiring freezes, and reduced
investment.
'The next few months are likely to remain volatile and the full impacts of a
global trade war are still uncertain. Businesses will be looking to
government to provide stability and avoid any further pain.'
Internet link: GOV.UK BCC