HMRC Late Payment Interest Calculator
How to Use This Calculator
The principal tax amount that is late — do not include earlier interest.
The original payment deadline (e.g., 31 January for Self Assessment, 9 months after year end for Corporation Tax).
The date you actually paid or plan to pay HMRC.
HMRC calculates interest daily from the due date to the payment date.
Frequently Asked Questions
What is the current HMRC late payment interest rate?
HMRC charges interest at the Bank of England base rate plus 2.5%. With the base rate at 4.75%, the current rate is 7.25% per annum (from late 2024). This rate changes when the Bank of England changes base rates.
When does HMRC start charging interest?
Interest starts from the day after the payment due date. For Self Assessment, this is 1 February (for the 31 January deadline). For Corporation Tax, it's 9 months and 1 day after the accounting period ends.
Is late payment interest deductible?
No — HMRC interest on late tax payments is not tax-deductible. This is different from commercial loan interest.
Are there penalties as well as interest?
Yes — penalties are separate from interest. Late filing penalties start at £100 for a day late, with additional penalties at 3 months, 6 months, and 12 months. Late payment surcharges can also apply for some taxes.
What if I can't pay my tax bill?
Contact HMRC before the due date to arrange a Time to Pay agreement. This can spread payments over 12 months or more. Interest still accrues, but penalties for non-payment may be avoided.
Does HMRC pay interest on tax refunds?
Yes — HMRC pays 'repayment interest' if they hold your tax too long. The repayment rate is base rate minus 1% (minimum 0.5%), currently around 3.75% — lower than the rate they charge.
What are the Corporation Tax payment deadlines?
Large companies pay Corporation Tax in quarterly instalments. SME companies pay 9 months and 1 day after the accounting period ends. Very large companies pay instalments from month 7 of the accounting period.
How does HMRC calculate interest?
HMRC uses simple daily interest: (Tax amount × annual rate ÷ 365) × days late. There is no compounding. The calculation uses the exact number of calendar days from the due date to the payment date.