Historically, the interest rate charged by HM Revenue & Customs on tax repayments has been set at 1.5 percentage points below the Bank of England base rate.

When the Bank of England’s Monetary Policy Committee voted to reduce the Bank of England base rate to 1.5% in January, the interest on tax repayments fell to the lowest possible rate of 0% and has stayed at that level ever since.

Now, HMRC has announced that a new minimum interest rate of 0.5% is to be set on tax repayments, so that interest will still be payable even when the Bank of … Continue Reading