Other news in brief

On 17 February 2025, HM Treasury published a paperopens in a new tab on the Business Rates Forward Look. This paper reiterates the Government’s intentions to reform business rates and sets out the timelines for the Transforming Business Rates consultation and 2026 Revaluation. The paper also builds upon the announcement made in the October 2024 paperopens in a new tab, outlining limits contained in the Non-Domestic Rating (Multipliers and Private Schools) Bill on how much the rates for new multipliers can differ from the rates of existing multipliers:

• The rate for the large multiplier cannot be more than 10p higher than the standard multiplier rate;
• The rates for the standard Retail, Hospitality and Leisure (RHL) multiplier and small RHL business multiplier cannot be lower than 20p less than the small business multiplier; and
• These maximum and minimum rates should not be taken as the intended rates for these multipliers. Rather, these provide flexibility to adapt to outcomes in 2026 whilst also acting as guardrails, particularly to reassure stakeholders there are legislative limits to the rate of the large multiplier.

The paper confirms that eligibility for the new RHL multipliers will be set through secondary legislation, and the Government intends that the scope will broadly reflect the existing RHL relief.

On 6 February 2025, the Bank of England Monetary Policy Committee voted to reduce the Bank of England base rate to 4.5 percent from 4.75 percent. As a result, HMRC interest rates for late and early payments have also reduced. HMRC’s late payment interest rate for most taxes is set at the Bank of England base rate plus 2.5 percent, so their late payment interest rate will reduce from 7.25 percent to 7 percent. Interest charged on underpaid quarterly corporation tax instalment payments is calculated as base rate plus 1 percent, so this reduces to 5.5 percent. These changes came into effect on 17 February 2025 for quarterly instalment payments and will come into effect on 25 February 2025 for other late payments. HMRC will also reduce their repayment interest rate for most taxes to 3.5 percent, as it is set at Bank Rate minus 1 percent, with a 0.5 percent lower limit. For interest paid on overpaid quarterly instalment payments and on early payments of corporation tax not due by instalments the rate is 4.25 percent.

On 6 February 2025, the Bank of England Monetary Policy Committee voted to reduce the Bank of England base rate to 4.5 percent from 4.75 percent. As a result, HMRC interest rates for late and early payments have also reduced. HMRC’s late payment interest rate for most taxes is set at the Bank of England base rate plus 2.5 percent, so their late payment interest rate will reduce from 7.25 percent to 7 percent. Interest charged on underpaid quarterly corporation tax instalment payments is calculated as base rate plus 1 percent, so this reduces to 5.5 percent. These changes came into effect on 17 February 2025 for quarterly instalment payments and will come into effect on 25 February 2025 for other late payments. HMRC will also reduce their repayment interest rate for most taxes to 3.5 percent, as it is set at Bank Rate minus 1 percent, with a 0.5 percent lower limit. For interest paid on overpaid quarterly instalment payments and on early payments of corporation tax not due by instalments the rate is 4.25 percent.

Watch the latest episode of KPMG Talking Taxopens in a new tab presented by Global Head of Tax Policy for KPMG International, Grant Wardell-Johnson. This is a series which delves into a specific topic of interest for tax leaders, breaking down complex concepts into insights, all in the space of five minutes.