HMRC raises rates on overdue taxes

HMRC has raised the interest rate that applies to overdue taxes to 3.25%, up from 2.6% in April 2020 and the third increase since the start of the year. The higher rates take effect on April 5 and will hit the 1.3m freelancers, landlords and other workers who have yet to file their tax return for the year. Some 850,000 taxpayers on Time to Pay repayment plans will also be affected. The interest rate HMRC pays on tax refunds, however, will stay frozen at 0.5% and has not risen for more than a decade.