HMRC late payment interest, interest rates and penalties calculator (2026).

Use the formula: unpaid tax × annual interest rate × days late ÷ 365. At 7.75%, £5,000 paid 30 days late gives £31.85 of simple interest. If HMRC changes its rate during the overdue period, split the calculation into separate date ranges and use the rate that applied to each range. Penalties are calculated separately.

HMRC charges 7.75% a year simple interest from the payment due date. HMRC interest rates are linked to the Bank of England base rate: late payment interest is base rate plus 4% (raised from base plus 2.5% on 6 April 2025), and it changes automatically whenever the base rate moves.

When HMRC repays tax you overpaid, it adds repayment interest at base rate minus 1%, with a minimum of 0.5% — currently 2.75% a year. Interest paid by HMRC runs from the later of the payment date and the original due date until the repayment is made. The gap between the two rates is deliberate: it makes paying late costly and leaving money with HMRC unattractive.

Paying Corporation Tax late costs interest, not a percentage penalty: HMRC charges late payment interest at 7.75% a year from the day after the payment deadline — 9 months and 1 day after the end of the accounting period — until the day it is paid. Penalties for Corporation Tax come from filing the CT600 late, and rise at 3, 6 and 12 months. Large companies paying by quarterly instalments are charged 6.25% on late instalments until the normal due date, and HMRC pays 3.50% on instalments paid early or overpaid. Choose Corporation Tax in the calculator to see both.

There is no penalty if the VAT is paid within 15 days of the due date. Paid between 16 and 30 days late, the penalty is 3% of the VAT outstanding at day 15. After 30 days it becomes 3% of the amount outstanding at day 15 plus 3% of the amount outstanding at day 30, and a second penalty then accrues daily at 10% a year until the VAT is paid. Late payment interest at 7.75% a year runs on top from the due date.

Usually, yes. HMRC offers payment plans for overdue tax, which you can check your eligibility for and set up online, or by contacting HMRC. It checks affordability: you will normally be asked to pay about half of what is left each month after rent, food, bills and fixed outgoings, and there is no set time limit on the plan. Late payment interest keeps running on the unpaid balance, so paying faster costs less in total. Free debt advice is available from MoneyHelper in England and Wales and Scotland Debt Solutions in Scotland.

Yes, if you have a reasonable excuse such as serious illness, bereavement or HMRC delays. Countify can prepare and submit a penalty appeal.

The Self Assessment late filing penalty is £100 immediately, plus £10 per day after 3 months up to £900, plus 5% of tax or £300 after 6 and 12 months.

Penalties are fixed amounts at set milestones. Interest is charged at a simple daily rate on the outstanding tax. They do not compound on each other.

For most tax payments, interest runs from the day after the payment due date until the date HMRC receives the payment. Special rules can apply to some liabilities, and interest continues on any balance left unpaid after a part-payment or Time to Pay arrangement.

As soon as possible. Every day adds to the interest charge, and even a part-payment reduces the amount on which interest accrues.

HMRC charges £100 per 50 employees for each month (or part month) a P11D or P11D(b) is filed late, plus interest on any Class 1A National Insurance paid late — calculated the same way as the late payment interest above. The filing deadline is 6 July after the tax year end, with payment due by 22 July (19 July if paying by cheque).

Yes. Interest on tax settled through a disclosure facility (such as the Worldwide Disclosure Facility) runs from each year's original due date to the date of payment, using the same simple daily-rate method as any other late payment — it just typically covers several tax years at once, so the total can be substantial even at a modest annual rate.