Cengolio · Fines · HMRC interest

HMRC interest

HMRC charges interest from the first day tax is late and pays a lower rate on money it holds of yours. Since April 2025 the gap has been policy: base rate plus 4 points one way, base minus 1 the other. At today's rates the same sum, over the same days, costs nearly three times more travelling in one direction than the other.

Amount owed

Payment was due

Paid how late?

90 days late

1 day two years

Try:

Enter an amount to see both sides.

IF YOU OWE HMRC

—

s. 101 FA 2009 · base + 4

IF HMRC OWES YOU

—

s. 102 FA 2009 · base - 1, floor 0.5%

Late payment 7.75% and repayment 2.75%, effective 9 January 2026, verified unchanged 18 July 2026 · gov.uk

These are HMRC's main rates. Companies paying Corporation Tax by quarterly instalments run on separate, lower rates. The calculator starts at 6 April 2025, when the late payment margin rose from 2.5 to 4 points; earlier periods ran at the old margin.

Interest is automatic and runs on unpaid penalties too, s. 101 FA 2009; a time to pay arrangement spreads the bill without stopping the clock. As a rule there is no separate appeal against the interest, only against the tax or penalty beneath it; whether HMRC agrees time to pay, and on what terms, is a conversation, and none of it is arithmetic. If the delay has also triggered penalties, the Self Assessment and PAYE calculators price those.

How we check these numbers