HMRC ups interest charges on late taxes but not refunds

HMRC has been criticised for increasing interest charges on owed taxes but not on refunds. The tax office has raised the rate at which interest builds on tax debts, from 2.75% to 3%, following the Bank of England’s decision to increase the base rate from 0.25% to 0.5%. However, the rate paid by HMRC when it refunds miscalculated and overpaid tax has remained frozen at 0.5% since 2009. HMRC said interest on late payments was always set at 2.5 percentage points higher than the bank rate, while the rate on refunds would never fall lower than a floor of 0.5%. Defending its stance, a spokesperson said: “Most other comparable tax authorities take the same approach.”

 

The Sunday Telegraph

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