HMRC News Updates
Student Loans Interest Rates and Repayment Threshold Announcement
The Department for Education confirmed the annual updates to interest rates and repayment thresholds for various student loans on 13 August 2024. For undergraduate Income Contingent Loans, Plan 1 loans will have an interest rate of 4.3% (RPI), with the repayment threshold rising to £26,065 in April 2025. Plan 2 loans will have interest rates varying between 4.3% and 7.3%, depending on income, with a repayment threshold of £28,470. Plan 5 loans will have a 4.3% interest rate, and the repayment threshold will be £25,000 from April 2026. Postgraduate loans will have a 7.3% interest rate, while Mortgage Style loans will see a 4.3% interest rate and a deferment threshold of £39,543.
HMRC late payment interest rates to be revised after Bank of England cuts base rate
Following the Bank of England’s decision on 1 August 2024 to lower the base rate from 5.25% to 5%, HMRC will adjust its interest rates for late payments and repayments. These changes will take effect from 12 August 2024 for quarterly instalment payments and 20 August 2024 for non-quarterly instalments.
HMRC interest rates are legally linked to the Bank of England base rate. The late payment interest rate is set at the base rate plus 2.5%, while repayment interest is set at the base rate minus 1%, with a minimum rate of 0.5%.
These rates are designed to encourage timely payment of taxes and to fairly compensate taxpayers who overpay. Further details on the updated interest rates will be provided shortly.
Draft regulations: The Alcoholic Products (Excise Duty) (Amendment) Regulations 2024
The consultation on the Alcohol Duty Review, running from 5 February 2024 to 18 March 2024, sought feedback on draft regulations aimed at simplifying the alcohol duty system. The planned changes include a unified digital approval and return system for alcohol producers, a standardised return period, and uniform deadlines for returns and payments. These updates are designed to streamline administration and reduce the burden on businesses and HMRC. A new digital service for returns and payments is expected to launch on 1 March 2025. The consultation aimed to ensure the regulations effectively implement the policy changes.
