HMRC Late Payment Interest Rises After the Bank Rate Rise

HMRC said on 6 November that the interest it charges on late tax payments will go up this month, following the Bank of England raising its base rate to 4.00% from 3.75% on 5 November. The detail is in HMRC's announcement.

According to HMRC, the new rates take effect on 16 November 2026 for quarterly instalment payments and on 24 November 2026 for non-quarterly instalment payments. It says the figures on its interest rates page will be updated shortly, so the exact new percentage had not been published when we read the announcement.

HMRC explains how the rate is set. Late payment interest is currently base rate plus 4%, and repayment interest, paid when you have overpaid, is base rate minus 1%, with a floor of 0.5%. If the formula stays the same, the arithmetic puts late payment interest at 8% after the change, up from 7.75%. That sum is ours, not HMRC's, so wait for its own published figure before you rely on it.

What does it mean for you? If you owe HMRC money, or are paying a bill in instalments, the interest on what is outstanding will cost a little more from those dates. If you are due a repayment, the interest HMRC pays you rises too. If you pay on time, nothing changes.

If you are behind with a tax bill, the sensible step is to look at your balance in your HMRC online account and check the current rate on GOV.UK. If paying in full is hard, HMRC is the place to ask about your options, and an accountant can help you work out what suits your business. This is a tax matter, not a website one, and we are not accountants. Our guides cover the money and legal questions a small business website raises, and if you have a question about the website side, get in touch.