HMRC New rates of Interest from 6 December 2008
HMRC have made a further announcement in relation to interest rates which will take effect from 6 December 2008 in response to the strong market movements in interest rates. This announcement covers a wide range of taxes and the main changes are listed below.
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 6.5% to 5.5%
– The rate of interest in overpaid taxes reduces from 2.25% to 1.5%
Petroleum Revenue Tax / Advance Corporation tax / Development Land tax
– The rate of interest changes from 5% to 4.25%
Income Tax on company payments due on or after 14 October 1999
– The rate of interest changes from 6.5% to 5.5%
Inheritance Tax
– The rate of interest remains unchanged
Corporation Tax
– On late payments in relation to accounting periods ending on or before 30 September 1993 before CT Pay & file to 4.25% (from 5%). 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 1.25% (from 2%)
– On unpaid CT for accounting periods on or after 1 July 1999 (other than underpaid instalments) to 5.5% (from 6.5%)
– On overpaid CT after 1 July 1999 for periods after the normal due date 2% (from 3%)
Default Interest (mainly relating to underdeclared VAT / Late payments of Customs Duty etc)
– The rate of interest changes from 6.5% to 5.5%
Statutory Interest (mainly relating to VAT and other indirect taxes)
– The rate of interest in respect of official error changes from 3% to 2%