HMRC Interest Rates Rise in November 2026: What Late Tax, VAT and Corporation Tax Payments May Cost
Information checked on 9 November 2026. HMRC announced on 6 November 2026 that certain tax interest rates would rise after the Bank of England increased Bank Rate from 3.75% to 4.00% on 5 November. The general late-payment interest rate is due to rise from 7.75% to 8.00% on 24 November 2026, while specific Corporation Tax quarterly-instalment rates change on 16 November.[1][2]
Two common misunderstandings should be avoided. The 8% figure is an annual late-payment interest rate, not a one-off 8% penalty. Companies within the quarterly-instalment regime also need to use the separate rates that apply to that system.
01 | Which rates has HMRC confirmed?
Interest category：General late-payment interest；Rate still applying on 9 November 2026：7.75%；Announced new rate：8.00%；Effective date：24 November 2026
Interest category：General repayment interest where applicable；Rate still applying on 9 November 2026：2.75%；Announced new rate：3.00%；Effective date：24 November 2026
Interest category：Interest on underpaid Corporation Tax quarterly instalments；Rate still applying on 9 November 2026：6.25%；Announced new rate：6.50%；Effective date：16 November 2026
Interest category：Interest on overpaid quarterly instalments or qualifying early payments；Rate still applying on 9 November 2026：3.50%；Announced new rate：3.75%；Effective date：16 November 2026
These figures come from HMRC's table updated on 6 November 2026. The 6.50% quarterly-instalment rate and the 8.00% general late-payment rate apply in different circumstances.[2]
02 | Which taxes may be affected?
HMRC's general interest tables cover a range of liabilities, including Income Tax, National Insurance contributions, Capital Gains Tax, certain stamp taxes and VAT for relevant periods from 1 January 2023. The tables also identify Corporation Tax categories.[2]
The start date and applicable rate depend on the tax, accounting or tax period, statutory due date and payment regime. For example:
Self Assessment: unpaid tax after the statutory payment date may attract late-payment interest. Any separate penalty must be considered under its own rules.
VAT: late-payment interest and separate filing or payment penalties may both be relevant. Interest is not itself the penalty.
Corporation Tax: ordinary company tax payments and quarterly instalments for companies within that regime use different interest rules.
03 | What could one month of interest on £10,000 look like?
For a simple mathematical illustration, assume that £10,000 is already subject to general late-payment interest, the balance remains unchanged for 30 days and no other HMRC adjustment applies:
at 7.75% a year: £10,000 × 7.75% × 30 ÷ 365 is approximately £63.70;
at 8.00% a year: £10,000 × 8.00% × 30 ÷ 365 is approximately £65.75;
the illustrative 30-day difference is approximately £2.05.
This demonstrates an annualised interest rate. It is not HMRC's calculation for every liability. The real amount depends on the tax due date, the interest start date, changes in rate, payments and the rules for the particular tax.[2]
04 | Why do Corporation Tax quarterly-instalment rates change earlier?
Some companies pay Corporation Tax through quarterly instalments. HMRC publishes separate interest rates for this regime. From 16 November 2026, the announced rates are:
6.50% for underpaid quarterly instalments; and
3.75% for overpaid instalments or qualifying early payments.[2]
This does not mean every UK limited company must begin quarterly instalments on 16 November. Whether the regime applies depends on the company's size, profits and other statutory conditions.
05 | What if the tax cannot be paid in full?
HMRC provides guidance for taxpayers who cannot pay on time. In appropriate cases, a taxpayer may be able to agree a payment plan, subject to HMRC's assessment of affordability and the circumstances.[3]
Check the tax and period shown on the bill, update cash-flow forecasts, keep proof of payments and contact HMRC through an official channel promptly. A payment arrangement does not automatically guarantee that all interest or penalties will be cancelled; the terms confirmed by HMRC should be checked.
Frequently Asked Questions
Did HMRC begin charging 8% on 9 November 2026?
No. The general new late-payment rate is shown as taking effect on 24 November 2026.[2]
Is the 8% an additional penalty?
No. It is an annual late-payment interest rate for the relevant regime. Separate statutory penalties may also arise.
Do large companies within quarterly instalments also use 8%?
Not for the quarterly-instalment underpayment rate described here. That rate is due to become 6.50% on 16 November 2026.[2]
Is repayment interest increasing as well?
Yes. The general repayment-interest table shows an increase from 2.75% to 3.00% on 24 November 2026, although not every repayment automatically qualifies.[2]
Key takeaway
This is an update to HMRC tax interest rates following a change in Bank Rate, not a new universal tax penalty. Individuals and companies should identify the due date, applicable interest table, payment regime and any separate penalty rules.
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Reference Links
As at 9 November 2026, HMRC had published the new rates but their specified effective dates had not yet arrived. This article is general information and is not a calculation of interest or penalties for a specific liability.
