Local government finance circular 4/2026: non-domestic interest rate 2026 to 2027

To: Chief Executives and Directors of Finance of Scottish local authorities

Dear Sir/Madam,

The Non-Domestic Rating (Payment Of Interest) Scotland Regulations 1992 & Amendment Regulations 2009: interest rate for 2026-27

I am directed by the Scottish Ministers to draw your attention to the interest rate to be applied for 2026-27 in calculating the interest due when repaying rates overpaid in error or following alterations to the valuation roll.

The appropriate rate is set by regulation 4(2)(e) of the above Regulations at 1% below the base rate set by the Bank of England. The relevant base lending rate on 15 March 2026 was 3.75%. As such the interest rate to be applied from 1 April 2026 to 31 March 2027 will be 2.75%.

The rates of interest on overpayments in respect of previous years will remain as set out in Annex A.

This circular has been published on the Scottish Government’s website at https://www.gov.scot/collections/local-government-finance-circulars/. Any enquiries on it should be addressed to me.

Yours faithfully,

Anouk Berthier

Local Government and Analytical Services Division

Annex A

Rates of interest on overpayments for previous years.

3.50% for 2025-26

4.25% for 2024-25

3% for 2023-24    

0% for 2022-23

0% for 2021-22  

0% for 2020-21      

0% for 2019-20

0% for 2018-19     

0% for 2017-18   

0% for 2016-17

0% for 2015-16   

0% for 2014-15

0% for 2013-14

0% for 2012-13    

0% for 2011-12     

0% for 2010-11

0% for 2009-10  

4.25% for 2008-09

4.25% for 2007-08

3.5% for 2006-07

3.75% for 2005-06

3% for 2004-05

2.75% for 2003-04

3% for 2002-03      

4.75% for 2001-02

5% for 2000-01

4.5% for 1999-2000