HMRC Interest and Penalties Calculator, 2026/27
Late tax payments attract both daily interest and separate late payment penalties under HMRC's points-based regime. Enter the tax owed, days late and the penalty percentages that apply to your situation to see the full combined cost.
The hmrc interest and penalties 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. Late payment interest is calculated daily at HMRC's current rate of 7.8% per year on the full amount owed for the whole period it remains unpaid. 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.
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Result, 2026/27
Total interest and penalties
Late payment interest
At 7.8% per yearFirst late payment penalty (day 31)
Second late payment penalty (accruing daily from day 31)
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
Late payment of tax can trigger two separate costs: daily interest, currently 7.8% per year, calculated on the full outstanding balance for every day it remains unpaid, and separate late payment penalties charged under HMRC's points-based regime once a payment is a set number of days overdue.
The calculator applies daily interest across the whole period entered, then applies a first penalty once the payment passes 30 days overdue, and a second penalty that accrues daily from day 31 onward until the balance is cleared, using the percentages you enter to reflect the specific regime that applies to your tax and situation.
Because the exact penalty percentages and trigger points vary by tax type and have changed over time as the penalty regime has been rolled out across different taxes, you should confirm the current rates for your specific circumstances on GOV.UK before treating this as a final figure.
Why interest and penalties are separate
Interest exists purely to compensate HMRC for not having the money on time and is not designed to be punitive, whereas penalties exist specifically to encourage timely payment and can be appealed or reduced where there is a reasonable excuse for the delay.
Both can apply to the same late payment at the same time, which is why the combined cost of paying tax significantly late can be considerably higher than either figure looked at in isolation.
Reducing the impact
Contacting HMRC and agreeing a Time to Pay arrangement before a penalty trigger date is reached can prevent a penalty from being charged at all, even though interest will continue to accrue on the outstanding balance throughout the arrangement.
Where a penalty has already been charged, a reasonable excuse claim, submitted promptly and with supporting evidence, can lead to it being cancelled or reduced, though HMRC applies a fairly high bar for what counts as reasonable.
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
Do I pay both interest and a penalty on the same late payment?
Yes, interest and late payment penalties are separate charges that can both apply to the same overdue tax at the same time, so the total cost of paying late can be significantly more than interest alone.
Can penalties be cancelled?
Yes, if you have a reasonable excuse for paying late, such as a serious illness or an unforeseeable event, you can appeal the penalty and HMRC may cancel or reduce it, though the excuse needs to genuinely explain the delay.
Does agreeing a Time to Pay plan stop penalties?
Agreeing a Time to Pay arrangement before a penalty deadline is reached can prevent that penalty from being charged, but interest continues to accrue on the outstanding balance for as long as it remains unpaid under the plan.
Are the penalty percentages the same for every tax?
No, the exact percentages and trigger points differ depending on the tax involved and have been introduced in stages across different taxes, so you should check the specific regime that applies to your situation on GOV.UK.
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