HMRC charges late payment interest at Bank Rate plus 4%. After the Bank of England raised Bank Rate from 3.75% to 4% on 5 November 2026, the rate rises from 7.75% to 8% from 24 November 2026. Repayment interest on overpaid tax rises from 2.75% to 3%, set at Bank Rate minus 1%.
TL;DR · LAST REVIEWED 9 NOVEMBER 2026
- HMRC late payment interest is 8% from 24 November 2026, up from 7.75%.
- Repayment interest, paid by HMRC on overpaid tax, is 3% from 24 November 2026, up from 2.75%.
- Late payment interest is Bank Rate plus 4%; repayment interest is Bank Rate minus 1%, never below 0.5%.
- Corporation Tax quarterly instalment rates changed from 16 November 2026: 6.50% on underpayments and 3.75% on overpayments.
- Interest is separate from penalties. Late Self Assessment payments also carry 5% penalties at 30 days, 6 months and 12 months.
HMRC interest rates at a glance
| Rate | Before | From | New rate |
| Late payment interest | 7.75% | 24 November 2026 | 8.00% |
| Repayment interest | 2.75% | 24 November 2026 | 3.00% |
| CT underpaid quarterly instalments | 16 November 2026 | 6.50% | |
| CT overpaid instalments and early payments | 16 November 2026 | 3.75% | |
| Bank Rate | 3.75% | 5 November 2026 | 4.00% |
Source: HMRC
KEY FACTS
- Late payment interest: 8.00% from 24 November 2026 (HMRC).
- Repayment interest: 3.00% from 24 November 2026 (HMRC).
- Bank Rate: raised from 3.75% to 4.00% on 5 November 2026 (HMRC news, 6 November 2026).
- Formula: Bank Rate plus 4% for late payment since 6 April 2025, previously plus 2.5% (HMRC).
- Late Self Assessment payment penalties: 5% of tax unpaid at 30 days, 6 months and 12 months (GOV.UK).
How HMRC sets late payment and repayment interest
HMRC interest rates are linked to the Bank of England base rate, known as Bank Rate, and change when Bank Rate changes. Late payment interest is set at Bank Rate plus 4% from 6 April 2025; before that date it was Bank Rate plus 2.5%. Repayment interest, which HMRC pays on tax overpaid, is set at Bank Rate minus 1%, with a lower limit of 0.5%.
The Bank of England Monetary Policy Committee announced on 5 November 2026 that Bank Rate would rise from 3.75% to 4.00%. HMRC published the new rates on 6 November 2026. They apply from 16 November 2026 for quarterly instalment payments and from 24 November 2026 for everything else.
| Rate | Formula | From 24 November 2026 |
|---|---|---|
| Late payment interest | Bank Rate plus 4% (plus 2.5% before 6 April 2025) | 8.00% |
| Repayment interest | Bank Rate minus 1%, with a lower limit of 0.5% | 3.00% |
Source: HMRC: interest rates for late and early payments
Current and past HMRC interest rates
From 24 November 2026, HMRC late payment interest is 8.00% and repayment interest is 3.00%. From 9 January 2026 to 23 November 2026 the rates were 7.75% for late payment and 2.75% for repayment. The rates were 8.00% and 3.00% from 27 August 2025, and 8.25% and 3.25% from 28 May 2025.
On 6 April 2025 late payment interest rose from 7.00% to 8.50% when the margin over Bank Rate rose from 2.5% to 4%. Repayment interest stayed at 3.50% at that time. In August 2024 the rates were 7.50% for late payment and 4.00% for repayment.
| Rate applies from | Late payment interest | Repayment interest |
|---|---|---|
| 24 November 2026 | 8.00% | 3.00% |
| 9 January 2026 | 7.75% | 2.75% |
| 27 August 2025 | 8.00% | 3.00% |
| 28 May 2025 | 8.25% | 3.25% |
| 6 April 2025 | 8.50% | 3.50% |
| 25 February 2025 | 7.00% | 3.50% |
| 26 November 2024 | 7.25% | 3.75% |
| 20 August 2024 | 7.50% | 4.00% |
Source: HMRC: interest rates for late and early payments
Which taxes the main rates cover
The main late payment and repayment rates apply to Income Tax, National Insurance contributions and Capital Gains Tax, according to HM Revenue and Customs. They also apply to Stamp Duty Land Tax, Stamp Duty and Stamp Duty Reserve Tax from 1 October 1999.
VAT is covered for accounting periods starting on or after 1 January 2023. Alcohol Duty is covered from 1 September 2025 and Vaping Product Duty from 1 October 2026.
HMRC publishes separate tables for Corporation Tax, Inheritance Tax, judgement debts and other duties on the same page.
Corporation Tax quarterly instalment rates
Large companies that pay Corporation Tax in quarterly instalments have their own interest rates, as stated by HM Revenue and Customs. From 16 November 2026 the rate charged on underpaid quarterly instalment payments is 6.50%.
From 16 November 2026 the rate paid on overpaid quarterly instalments, and on early payments of Corporation Tax not due by instalments, is 3.75%. These rates take effect earlier than the main rates, which change on 24 November 2026.
| Interest on | Rate |
|---|---|
| Underpaid quarterly instalment payments | 6.50% |
| Overpaid instalments and early payments | 3.75% |
Source: HMRC: interest rates for late and early payments
Interest, penalties and paying in instalments
Interest and penalties are separate charges. GOV.UK says late Self Assessment payers are charged interest on the amount owed as well as penalties. Late Self Assessment payment penalties are 5% of the tax unpaid at 30 days, at 6 months and at 12 months.
Filing a Self Assessment return late brings an initial £100 penalty, then £10 a day after 3 months up to a maximum of £900. After 6 months a further penalty of 5% of the tax due or £300 applies, whichever is greater, and another at 12 months.
GOV.UK says people who cannot pay on time may be able to set up a payment plan to pay in instalments, and HMRC checks whether the plan is affordable.
| Point | Charge |
|---|---|
| From the payment deadline | Late payment interest on the amount owed |
| 30 days late | Penalty of 5% of the tax unpaid |
| 6 months late | Further penalty of 5% of the tax unpaid |
| 12 months late | Further penalty of 5% of the tax unpaid |
Source: GOV.UK: Self Assessment penalties
RELATED GUIDES
DISCLAIMER
This article is editorial information, not financial advice. Kael Tripton Ltd is not authorised or regulated by the Financial Conduct Authority. Figures were correct at the last review date shown above; verify current rates and rules with the primary sources listed below before acting.
Frequently asked questions
What is the HMRC late payment interest rate?
The HMRC late payment interest rate is 8.00% from 24 November 2026, up from 7.75%. It is set at the Bank of England Bank Rate plus 4%.
What interest does HMRC pay on overpaid tax?
HMRC pays repayment interest of 3.00% from 24 November 2026, up from 2.75%. It is set at Bank Rate minus 1%, with a lower limit of 0.5%.
Why did HMRC interest rates change in November 2026?
The Bank of England raised Bank Rate from 3.75% to 4.00% on 5 November 2026, and HMRC rates are linked to Bank Rate. HMRC published the new rates on 6 November 2026.
Is late payment interest the same as a penalty?
No. Interest is charged on tax paid late from the deadline. Penalties are separate: for Self Assessment, 5% of the tax unpaid at 30 days, 6 months and 12 months.
When do the new Corporation Tax instalment rates start?
The new Corporation Tax instalment rates start on 16 November 2026: 6.50% on underpaid quarterly instalments and 3.75% on overpaid instalments and early payments.
SOURCES
- HMRC: Rates and allowances, HMRC interest rates for late and early payments (updated 6 November 2026), accessed 9 November 2026
- HMRC: HMRC interest rates update, 6 November 2026, accessed 9 November 2026
- GOV.UK: Self Assessment tax returns, penalties, accessed 9 November 2026
- GOV.UK: If you cannot pay your tax bill on time, accessed 9 November 2026
