When HMRC repays tax you overpaid, it usually adds repayment interest for the time it held your money. Choose how the overpayment arose, enter the amount and the dates, and see the interest worked out day by day at HMRC's published rates.
Simple interest at HMRC's repayment rates
Repayment interest is what HMRC pays you for holding money you overpaid. Under section 102 of the Finance Act 2009, an amount HMRC has to repay carries interest at the repayment interest rate from the repayment interest start date until the date it's repaid. If HMRC sets the amount off against another tax you owe, that counts as repayment on the date the set-off takes effect. It's simple interest: HMRC pays no interest on repayment interest.
The rate is the Bank of England rate minus 1%, and it never goes below 0.5% a year. Each change applies from an operative date, the 13th working day after the Monetary Policy Committee meeting that set the Bank rate, which is why HMRC's rate moves a few weeks after the Bank's. The current rate is 2.75%, in force since 9 January 2026.
| From | Repayment interest rate |
|---|---|
| 9 January 2026 | 2.75% |
| 27 August 2025 | 3.00% |
| 28 May 2025 | 3.25% |
| 25 February 2025 | 3.50% |
| 26 November 2024 | 3.75% |
| 20 August 2024 | 4.00% |
| 22 August 2023 | 4.25% |
| 11 July 2023 | 4.00% |
| 31 May 2023 | 3.50% |
| 13 April 2023 | 3.25% |
| 21 February 2023 | 3.00% |
| 6 January 2023 | 2.50% |
| 22 November 2022 | 2.00% |
| 11 October 2022 | 1.25% |
| 23 August 2022 | 0.75% |
| 29 September 2009 to 22 August 2022 | 0.50% |
Schedule 54 to the Finance Act 2009 sets the start date, and the calculator applies it for you:
Days are counted from the start date to the repayment date, so the first day of interest is the day after the start date. HMRC's manual gives examples: 31 January to 1 February is 1 day, 31 January 2021 to 3 June 2021 is 123 days, and a leap year adds a day, so 31 January 2020 to 1 March 2020 is 30 days. Each day earns interest at the rate in force on that day.
HMRC's VAT guidance shows the arithmetic. A company with a £10,000 VAT credit on a monthly return due on 7 November, filed on 1 November and repaid on 10 November, gets 3 days of interest, 8 to 10 November inclusive. At the illustrative rate of 0.5% used in the example, that's £10,000 × 0.5% × 3 ÷ 365 = 41p. In a second example, £3,000 overpaid for 18 days at 2% earns £2.96.
The dates in the first example are in November 2023, when the real rate was 4.25%, which the calculator uses, so the same credit earns £3.49. In the Compliance Handbook, a business paid VAT of £30,000 on 5 October 2023 for a return due on 7 October, then corrected the return and was repaid on 13 December. It gets 67 days of interest from 7 October, the due date, because it paid early.
No repayment interest is due on an amount HMRC repays because of a court or tribunal order that already allows interest. For VAT, HMRC says it won't pay interest if you paid in error, for example £1,000 instead of £100, and it doesn't pay interest on early payments. If you have overdue VAT returns, interest on a repayment return only starts once HMRC receives the last overdue return.
The Finance Act 2009 rules apply tax by tax, from dates set by Treasury order. HMRC's manual lists Income Tax and Capital Gains Tax in Self Assessment from 31 October 2011, which also covers Class 4 National Insurance and student loan payments in the tax calculation, and amounts due under PAYE from 6 May 2014. For VAT the rules apply to accounting periods starting on or after 1 January 2023, when repayment interest replaced the old repayment supplement. GOV.UK publishes the same repayment rates for Income Tax, National Insurance, Capital Gains Tax, stamp taxes and VAT.
Corporation Tax repayments are outside section 102 and follow their own interest rules, so this calculator doesn't cover them.
If you owe HMRC rather than the other way round, the late payment interest calculator works out what HMRC charges. The tax refund calculator estimates whether you've overpaid through PAYE, and the payments on account calculator shows when your Self Assessment payments are due and when you've paid too much.
2.75% a year, in force since 9 January 2026. It's the Bank of England rate minus 1%, and it never goes below 0.5%.
It's simple interest: the amount repaid × the rate × the number of days ÷ 365, with each day at the rate in force that day. The days run from the start date to the date HMRC repays or sets off the amount.
For tax you paid, from the later of the date you paid and the due date. For a VAT credit you didn't pay, from the later of the return's due date and the date you filed it. For Income Tax deducted at source, from 31 January after the tax year.
Not for Income Tax. Section 749 of ITTOIA 2005 says no Income Tax liability arises on repayment interest paid under section 102 of the Finance Act 2009.
No. If you pay before the due date, interest on any refund runs from the due date, not from the day you paid.
HMRC says the difference is in line with other tax authorities and with commercial practice on loans and deposits. Late payment interest is the Bank rate plus 4% from 6 April 2025, while repayment interest is the Bank rate minus 1%.
