HMRC has confirmed a reduction in late payment interest rates for delayed tax payments from 7.25% to 7% due to the Bank of England's base rate cut. Despite this reduction benefiting approximately 1.1 million taxpayers who missed the January deadline, the disparity remains stark; HMRC charges double the interest on unpaid taxes than what it pays on refunds. This suggests a mismatch in financial practices between taxpayer liabilities and HMRC payments, causing concern amongst financial experts and creating a burden on taxpayers.
But it's a small reprieve, in reality. The story here is that HMRC still charges double the amount of interest than it pays on money owed to taxpayers in the form of refunds and rebates.
HMRC stated that: "The difference between rates is in line with the policy of other tax authorities worldwide."
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