The standard interest charge on overdue UK tax will rise to 8% from 24 November, increasing the cost of balances that remain unpaid. HM Revenue & Customs announced the change on 6 November 2026 after the Bank of England raised its policy rate. HMRC will also pay more interest on qualifying repayments. Separate rates for some Corporation Tax payments change eight days earlier.
Key facts
- The standard late-payment rate for the main taxes rises from 7.75% to 8% on 24 November.
- The standard repayment rate rises from 2.75% to 3% on the same date.
- Separate rates on underpaid and overpaid Corporation Tax quarterly instalments change on 16 November.
Which rate applies to which payment?
The HMRC rate schedule lists Income Tax, National Insurance contributions, Capital Gains Tax and several duties among the regimes covered by its main rates. It also lists VAT for periods starting on or after 1 January 2023, which is the start date for the VAT regime shown in that table. The November change concerns interest on balances or qualifying repayments within those regimes. The rates in the table are annual percentages.
| Tax or payment category | Rate before change | New rate | Effective date in 2026 |
|---|---|---|---|
| Main taxes and duties, late payment | 7.75% | 8.00% | 24 November |
| Main taxes and duties, qualifying repayment | 2.75% | 3.00% | 24 November |
| Corporation Tax, underpaid quarterly instalment | 6.25% | 6.50% | 16 November |
| Corporation Tax, overpaid quarterly instalment or qualifying early payment | 3.50% | 3.75% | 16 November |
The corporate rates apply to different payment circumstances. The 6.50% figure is the charge listed for an underpaid quarterly instalment. The 3.75% rate is interest HMRC pays on an overpaid instalment and is also the rate listed for early payments of Corporation Tax that is not due by instalments. This explains why two companies dealing with Corporation Tax can encounter different rates and why the 8% headline figure cannot be used for every corporate balance.
The old figures are the rates listed immediately before each November change. The difference in each row is 0.25 percentage points. For scale, if an overdue balance of £10,000 attracted the main late rate for a full year with the principal and rate held constant, the difference between 7.75% and 8% would be £25 over that year. Actual interest depends on the balance, the period it is outstanding and the regime that applies.
Why did both charges and repayments rise?
The Bank of England’s Monetary Policy Committee voted 8 to 1 to raise Bank Rate from 3.75% to 4% at its meeting ending on 4 November. It published the decision on 5 November. The dissenting member preferred a larger increase to 4.25%. The tax-interest timetable comes from HMRC’s announcement the following day.
For the main taxes, HMRC sets the late charge at Bank Rate plus four percentage points. The standard repayment rate is Bank Rate minus one percentage point, with a floor of 0.5%. The floor is below the new calculated rate, so the increase passes through in full on both sides. The two standard rates therefore remain five percentage points apart.
For company finance teams, 16 November is the first date to check for balances in the quarterly instalment regime and qualifying early Corporation Tax payments. For taxpayers whose balances attract the main rates, 24 November is the relevant changeover. HMRC’s schedule gives the applicable rate for each category on either side of those dates.
