The rates of interest on unpaid and overpaid tax have varied considerably depending upon the particular tax involved. In September the rates are to be harmonised. A rate of 3% will apply to all unpaid taxes and 0.5% will apply on repayments. (This is particularly tough on inheritance tax because the present formula gives a rate of zero both ways.)

The rates will be linked to Bank of England base rate and will fluctuate accordingly. Interest on unpaid tax will be payable at 2.5% over base rate and repayment supplement will be payable at 1% below base rate, but with a minimum rate on repayments of 0.5%.