HMRC late payment interest cut by 0.25%

HMRC has reduced late payment and repayment interest rates following the cut to the base rate. 

The Bank of England cut the base rate to 5.0% on 1 August, the first reduction for over four years. 

This has triggered a cut in HMRC interest rates which are pegged to the base rate. 

From 20 August, the late payment interest rate was cut to 7.5% from 7.75%, where it had been for 12 months. The repayment interest rate was also reduced to 4.0% from 4.25% from 20 August. 

HMRC late payment interest is set at base rate plus 2.5%. Repayment interest is set at base rate minus 1%, with a lower limit - or 'minimum floor' - of 0.5%.