HMRC late payment penalties and interest explained

The late payment penalties

• 30 days late: 5% of the tax unpaid at that date.
• 6 months late: a further 5% of the tax still outstanding.
• 12 months late: another 5% of the tax still outstanding.

Interest on top

HMRC charges interest on late-paid tax from the due date until it is paid, at the published rate (linked to the Bank of England base rate). Interest is not a penalty and is not usually appealable, but it stops the day you pay.

Reducing it

Setting up a Time to Pay arrangement before the 30-day point can prevent the first 5% penalty. If you already have a reasonable excuse for paying late, the penalties can be appealed the same way as filing penalties.