HMRC announces changes to interest rates

Date: 17th October 2008

HM Revenue and Customs (HMRC) has announced changes to its interest rates on underpaid and overpaid corporation taxation.

The new rates will take effect on October 20th and will concern accounting periods ending on or after July 1st 2009.

Underpaid instalments of corporation tax will now attract an interest rate of six per cent, up from 5.5 per cent, while overpaid or paid early instalments of business taxation will see their rate decrease from 4.75 per cent to 4.25 per cent.

The changes are based on the average base lending rate of 4.5 per cent - as recently announced by the Bank of England - and calculated in accordance with relevant regulations, the government department said in a statement.

Small business start-ups have until October 31st to file a self-assessment tax return with HMRC, or alternatively, if submitting a tax return online, have until January 31st next year.