HMRC Late Payment Interest Calculator, 2026/27
HMRC charges daily interest on tax paid after the due date, currently well above base rate. Enter the amount owed and how many days late payment was, or is expected to be, to see the interest cost building up.
The hmrc late payment interest calculator runs on the rates and thresholds HMRC has published for the 2026/27 tax year, so the figures you see reflect the position your company is actually filing on rather than a historic set of bands. Change any input and the result recalculates immediately, with no sign-up and nothing sent anywhere.
If you are a director of a UK limited company, use it as a first look before a decision rather than as the decision itself. HMRC's late payment interest rate is set at 7.8% per year, linked to the Bank of England base rate plus a fixed margin, and can change during the year if the base rate moves. Real company positions bring in other income, reliefs, group structures and prior year adjustments that a single page of inputs cannot see, which is why the workings are written out below under personal & self assessment tax. Read those, then check the numbers against your own accounts, and speak to us if anything looks materially different from what you expected.
Last reviewed 12 September 2026 for the 2026/27 tax year. Reviewed by Waqas Sagar, Member of ICAEW, Fellow of ACCA, Fellow of AAT.
Regulated by
Regulated & AML supervisor
AAT fellow member
Xero Gold PartnerCertified advisor
QuickBooks PartnerCertified ProAdvisor100+ yearsCombined team experienceFully insuredUp to £2m indemnityHMRC Late Payment Interest Calculator
Result, 2026/27
Interest accrued
Annual late payment interest rate
Approximate cost per 30 days late
Total owed including interest
Illustration only, figures are based on the rates you have selected and the information entered. Please check your own position with us before acting.
Estimates for the 2026/27 tax year using published GOV.UK rates. Switch between 2026/27 and 2025/26 above.
How this is calculated
HMRC charges interest on most taxes paid after the due date, calculated daily from the day after the payment was due until the day it is actually paid. The current late payment rate is 7.8% per year, set at a margin above the Bank of England base rate and reviewed whenever the base rate changes.
The calculator converts the annual rate to a daily rate by dividing by 365, then multiplies the amount owed by the daily rate and the number of days late to give the interest charge, which is how HMRC's own systems calculate it for most taxes including income tax, corporation tax and VAT.
Because the rate is linked to the base rate, this cost can move up or down over the year, and it is separate from and in addition to any late payment penalty that may also apply.
Why the rate is set where it is
HMRC's late payment interest rate is deliberately set above the rate it pays on money it owes taxpayers (the repayment rate), which is designed to discourage taxpayers from treating HMRC as a cheap source of borrowing by simply not paying on time.
Because the rate compounds daily and applies from the very next day after the deadline, even a short delay on a large tax bill can add up meaningfully, particularly for VAT or corporation tax payments involving larger sums.
What to do if payment will be late
Interest cannot generally be avoided once a payment is late, but agreeing a Time to Pay arrangement with HMRC before the deadline, or as soon as possible after it, can prevent additional penalties from being charged even though interest will still accrue on the outstanding balance.
Paying as much as possible by the due date, even if not the full amount, reduces the balance interest is calculated on and therefore the total cost, so a partial payment is always worth making rather than waiting until the full amount is available.
What this means for your company
Treat the result as a planning figure for the 2026/27 tax year. If it changes what you were about to do, take a director's salary, a dividend, a large asset purchase or a filing decision, check it against your own accounts first. We can review the position with you and confirm the tax treatment before you commit.
Frequently asked questions
What is HMRC's current late payment interest rate?
HMRC currently charges 7.8% per year on most late paid taxes, a rate that is linked to the Bank of England base rate and can change during the year if the base rate moves.
Does interest apply to all taxes?
Yes, late payment interest applies to income tax, corporation tax, VAT and most other taxes administered by HMRC, calculated daily from the day after the due date until the tax is paid in full.
Is interest the same as a penalty?
No, interest simply compensates HMRC for late payment and is not a punishment; penalties are a separate, additional charge for paying late, calculated under a different set of rules and often based on how many days or months the payment is overdue.
Can I avoid interest by agreeing a payment plan?
No, interest continues to accrue on any outstanding balance even under an agreed Time to Pay arrangement, but agreeing the arrangement can help you avoid additional late payment penalties on top of the interest.
Keep going
Related calculators
Same rates, different question.
HMRC Interest and Penalties Calculator
Estimate the combined interest and late payment penalty cost of overdue tax for 2026/27, using HMRC's daily interest rate and the penalty percentages you specify.
CalculatorIncome Tax Calculator
Calculate your UK income tax, National Insurance and take-home pay for 2026/27 across salary and dividend income using the current bands and rates.
CalculatorSelf Assessment tax calculator
Estimate your Self Assessment bill for 2026/27 from self-employed profit, salary and dividends, including income tax, Class 2 and Class 4 National Insurance.
CalculatorLate filing penalty calculator
Work out Companies House late filing penalties and HMRC corporation tax penalties for a limited company, by how late the accounts and return are.