HMRC Interest Rates from 6 January 2009
HMRC have announced yet another series of changes to the rates of interest on direct and indirect taxes and national insurance contributions paid late and overpaid. The new rates will take effect from 6 January 2009.
Legislation has also been passed to allow HMRC to respond more quickly to changes in interest rates. From 7 January 2009, HRMC will change most interest rates 13 working days after the meeting of the Monetary Policy Committee of the Bank of England. Previously it took HMRC approximately one month to adjust rates.
Income Tax / Capital Gains Tax / Stamp Duties / National Insurance Contributions
· The rate of interest due on tax paid late, penalties and tax charged by assessment changes from 5.5% to 4.5%
· The rate of interest in overpaid taxes reduces from 1.5% to 0.75%
Petroleum Revenue Tax / Advance Corporation tax / Development Land tax
· The rate of interest changes from 4.25% to 3.5%
Income Tax on company payments due on or after 14 October 1999
· The rate of interest changes from 5.5% to 4.5%
Inheritance Tax
· The rate of interest changes from 3% to 2%
Corporation Tax
· On late payments in relation to accounting periods ending on or before 30 September 1993 before CT Pay & file to 3.5% (from 4.25%). These rates are the same for unpaid CT after 1 October 1993.
· On overpaid CT for accounting periods ending on or after 1 October 1993 to 0.5% (from 1.25%)
· On unpaid CT for accounting periods on or after 1 July 1999 (other than underpaid instalments) to 4.5% (from 5.5%)
· On overpaid CT after 1 July 1999 for periods after the normal due date 1% (from 2%)
Default Interest (mainly relating to underdeclared VAT / Late payments of Customs Duty etc)
· The rate of interest changes from 5.5% to 4.5%
Statutory Interest (mainly relating to VAT and other indirect taxes)
· The rate of interest in respect of official error changes from 2% to 1%