HMRC raises late payer rate to 15-year high

HMRC have started charging 7.5% interest on money owed to the tax office, the highest rate for 15 years. The rate is fixed at 2.5 percentage points above the Bank of England’s rate, but HMRC is only obliged to pay 4% on money owed to the public. Thousands of taxpayers who cannot afford to pay their tax bill on time due to soaring mortgage costs and inflationary pressures will be hit with the charge, as will those trying to find the money to pay inheritance tax bills. The Telegraph notes that the Chartered Institute of Taxation has previously urged the Government to review the “unfair” gap between the interest rate it charges and what it pays taxpayers.