Summer Budget 2015: Simplification of interest rates in relation to tax-related judgement debts

The current legislation provides for interest rates in litigation cases of between 0.5% (precedes court action) and 8% (follows court action).

From 8 July 2015, new legislation will be introduced to charge interest at the rate specified in the legislation where HMRC is the creditor, and the rate equal to the Bank of England base rate plus 2% where it is the debtor.

The simplification of the interest rates will provide taxpayers with more certainty as to the interest rate charged/applied.