HMRC has confirmed that the official rate will not be increased for director’s loans outstanding throughout the tax year 2024/25 using the normal averaging method of calculation, keeping it at 2.25% for the second year running, despite a base interest rate of 5.25%.

This seems an odd move as last time Bank of England interest rates were comparable with today’s rate in the mid 2000s, HMRC’s official rate of interest was scalable against base rates.

Bearing in mind the HMRC interest rate for late tax payments has been 7.75% since August 2023, the decision to hold the rate is even more surprising.