Question to the HM Treasury:

To ask the Chancellor of the Exchequer, if his Department will consider the potential merits of undertaking a review of the rate of interest paid to businesses on delayed VAT refunds.

Interest rates on unpaid and overpaid tax are set by legislation approved by Parliament. The legislation specifies formulae which set the rates and the formulae link HMRC rates to the prevailing Bank of England base rate.

The harmonised interest regime provides a set of rules that applies to all taxes and duties and ensures that interest is consistently and automatically charged and paid in all cases where amounts are paid late or where amounts have been overpaid.