WIREDGOV

HM Revenue & Customs interest rates

HM REVENUE AND CUSTOMS News Release (Ref:NAT 16/09) issued by COI News Distribution Service. 17 February 2009

Interest rates charged on late payments and paid on overpayments for corporation tax quarterly instalment payments (QIPs) and also early payments of corporation tax not due by instalments have now been cut, HM Revenue & Customs (HMRC) confirm.

The new rates took effect from 16 February 2009.

The rates covering late payments and overpayments of all other direct taxes, indirect taxes and national insurance contributions remain unchanged this month.

HMRC continues to look at ways to simplify and harmonise the rules for interest charged and paid across all taxes and duties. In June 2008 a consultation document was published 'Interest - working towards a harmonised regime'. This was followed in November 2008 by a further consultation document. Both documents are available to view on the HMRC website.

Full details of the rate changes are available on HMRC's website at http://www.hmrc.gov.uk/news/interest-rates1602.htm.

Notes for editors

1. All interest rates charged and paid by HMRC are set by reference to formulae set out in legislation. The starting point for calculating the rate of interest is the 'reference rate'. The reference rate is the average of the basic lending rates applied by six of the UK's banks to which a 'rounding' rule is applied in most cases. The 'rounding' rule reduces or increases the average rate to the nearest whole number. The reference rate is then used in the statutory formula and then rounded once more to calculate the rate that should be applied. These statutory rules mean that HMRC rates do not always change.

2. This calculation is undertaken after all meetings of the Monetary Policy Committee.

Issued by HM Revenue & Customs Press Office
Press enquiries only please contact:
Madonna Grant
Tel: 020 7147 2331
E-mail: madonna.grant@hmrc.gsi.gov.uk

Website http://www.hmrc.gov.uk