It’s good news for anyone who has interest charges to pay HMRC and doesn’t affect anyone who receives interest from HMRC. With effect from 23rd August 2016, HMRC is cutting the interest rate it charges on late payments from the 3% rate that has been in force since 29 September 2009 to 2.75%. This is because it uses a formula for charging interest of the Bank of England base rate (now 0.25%) plus 2.5%.
HMRC has confirmed that there is to be no change to the repayment interest rate which will remain at 0.5% – the minimum rate HMRC has set for repayment interest. If your company current account pays no interest, you will be better off paying your tax bill early and earning 0.5%. Although this isn’t going to change your life, you might as well get something back from HMRC!
Even better than being charged a lower rate of interest is to get your accounts filed on time. This not only helps you run your business better, but also saves you HMRC interest charges altogether and HMRC interest charges. If you are struggling to keep up to date with HMRC, contact Alterledger using the form below to find out how get get back on track!
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