VAT late payment penalty calculator
VAT late payment penalties at a glance
What paying VAT late adds to the bill in some common cases, assuming the whole amount stays unpaid until it's paid in full and there's no Time to Pay arrangement. Click an amount to open the calculator with those answers filled in.
| VAT owed | Days late | First penalty | Second penalty | Interest | Total extra cost |
|---|---|---|---|---|---|
| £5,000.00 | 10 | £0.00 | £0.00 | £10.62 | £10.62 |
| £5,000.00 | 20 | £150.00 | £0.00 | £21.23 | £171.23 |
| £5,000.00 | 45 | £300.00 | £20.55 | £47.77 | £368.32 |
| £15,000.00 | 20 | £450.00 | £0.00 | £63.70 | £513.70 |
| £15,000.00 | 51 | £900.00 | £86.30 | £162.43 | £1,148.73 |
| £25,000.00 | 60 | £1,500.00 | £205.48 | £318.49 | £2,023.97 |
| £50,000.00 | 90 | £3,000.00 | £821.92 | £955.48 | £4,777.40 |
VAT late payment penalty calculator: key facts
- No late payment penalty applies if VAT is paid in full within 15 days of the deadline, but late payment interest runs from day 1.
- Paid 16 to 30 days late: a first penalty of 3% of the VAT still owed at day 15.
- Paid 31 or more days late: the first penalty becomes 3% of the amount owed at day 15 plus 3% of the amount owed at day 30, and a second penalty is charged daily at 10% a year from day 31 until you pay.
- Late payment interest is the Bank of England base rate plus 4% (from 6 April 2025): 7.75% from 9 January 2026 and 8.00% from 24 November 2026.
- Example: £15,000 paid 20 days late costs £513.70 extra; paid 51 days late it costs £1,148.73.
- Asking HMRC for Time to Pay by day 15 (or day 30) can mean lower or no penalties, but interest still runs on the balance.
- These rules apply to VAT accounting periods starting on or after 1 January 2023. Older periods used the default surcharge.
How does the calculator work out the penalty and interest?
It counts the days from the deadline to the day you pay in full, then applies HMRC's rules: 3% at day 16, another 3% at day 31, a second penalty of 10% a year for each day from day 31, and late payment interest at HMRC's rate for each day late.
- Days late = the number of days from the payment deadline to the day the VAT is paid in full. Paying on the deadline is 0 days late.
- First penalty, part 1: if you pay on day 16 or later, 3% of the VAT still owed at the end of day 15.
- First penalty, part 2: if you pay on day 31 or later, another 3% of the VAT still owed at the end of day 30.
- Second penalty: from day 31 up to and including the day you pay, VAT owed × 10% × days ÷ 365.
- Late payment interest: for each day from the day after the deadline up to and including the day you pay, VAT owed × HMRC's late payment interest rate on that day ÷ 365. HMRC's rates: 8.50% from 6 April 2025, 8.25% from 28 May 2025, 8.00% from 27 August 2025, 7.75% from 9 January 2026 and 8.00% from 24 November 2026 (earlier rates back to January 2023 are built in).
- Each charge is rounded to the nearest penny and added up.
The calculator reproduces GOV.UK's own worked examples exactly: £15,000 paid 51 days late gives a first penalty of £900 and a second penalty of £86.30 (£986.30), and £8,340 paid 7 days late at 8.5% gives £13.60 interest.
What does the calculator assume, and what does it leave out?
It assumes the whole amount stays unpaid until it's paid in full on one date, with no Time to Pay arrangement. It doesn't cover part payments, payments on account, the annual accounting scheme, penalties for filing late, or periods before 2023.
Inputs
- The VAT owed on the return (in pounds).
- The payment deadline.
- The date the VAT is (or will be) paid in full.
Assumptions
- Nothing is paid until the full amount is paid. If you pay part of it before day 15 or day 30, the real penalties will be lower, because they're based on what's still owed on those days.
- No Time to Pay arrangement is agreed. HMRC says agreeing one can mean lower or no late payment penalties.
- For future payment dates, interest uses HMRC's latest published rate. If the base rate changes, the real interest will too.
Not included
- Late submission penalty points and penalties (for filing the return late).
- VAT payments on account and annual accounting scheme instalments, which HMRC says don't get late payment penalties.
- Interest charged on unpaid penalties, and HMRC's 2-year assessment limit (the calculator stops at 730 days).
- VAT periods starting before 1 January 2023 (default surcharge rules).
This is an estimate, not tax advice. HMRC's figures in your VAT online account are the real ones.
How can you avoid or reduce VAT late payment penalties?
Pay in full, or ask HMRC for Time to Pay, within 15 days of the deadline to avoid any penalty; by day 30 to avoid the second stage. Interest still runs from day 1, so paying sooner always costs less.
| When | What GOV.UK says to do | What it avoids |
|---|---|---|
| Days 1 to 15 | Pay in full, or ask for Time to Pay | All late payment penalties |
| Days 16 to 30 | Pay in full, or ask for Time to Pay by day 30 | The second 3% and the daily second penalty |
| Day 31 onwards | Pay in full, or ask for Time to Pay | The second penalty and interest growing further |
If a Time to Pay arrangement is cancelled because you don't keep to it, HMRC says it would charge both penalties as if the arrangement never existed. You can ask for a review or appeal a penalty, and it may be cancelled if you have a reasonable excuse. Interest itself can't be appealed, only objected to in limited cases.
If you can't pay because cash is tied up in unpaid invoices, or a big quarter has come at the wrong moment, a short-term loan may be another option. Our VAT loans guide compares it honestly with Time to Pay.
What does paying £15,000 of VAT late actually cost?
Paid within 15 days, only interest. Paid 20 days late, £513.70 extra. Paid 51 days late, £1,148.73 extra, most of it penalties rather than interest.
Take a business with a VAT bill of £15,000 due on 7 August 2026, where HMRC's late payment interest rate is 7.75%:
- Paid on day 20: first penalty £450.00 (3%) plus £63.70 interest = £513.70.
- Paid on day 51: first penalty £900.00 (3% + 3%), second penalty £86.30 (21 days at 10% a year) and £162.43 interest = £1,148.73.
The jump at day 16 and again at day 31 is why the deadlines in the table above matter far more than the interest rate. Open this example in the calculator.
Related guides
VAT late payment penalty calculator: frequently asked questions
How much is the penalty for paying VAT late?
Nothing if you pay within 15 days, apart from interest. From day 16 it's 3% of what you owed at day 15. From day 31 another 3% of what you owed at day 30 is added, plus a second penalty charged daily at 10% a year until you pay.
Is there a penalty if I pay VAT one day late?
There's no late payment penalty within the first 15 days, but HMRC charges late payment interest from the first day the payment is overdue.
What interest rate does HMRC charge on late VAT?
The Bank of England base rate plus 4% from 6 April 2025. GOV.UK lists 7.75% from 9 January 2026 and 8.00% from 24 November 2026.
Does the calculator work for VAT before 2023?
No. Late payment penalties apply to VAT periods starting on or after 1 January 2023. Earlier periods used the VAT default surcharge.
Does paying part of the VAT reduce the penalty?
Yes. The penalties are based on what's still owed at day 15 and day 30, and the second penalty on the outstanding balance. This calculator assumes nothing is paid until the full amount, so part payments would make the real figure lower.
Can Time to Pay stop the penalties?
HMRC says a Time to Pay arrangement can mean lower or no late payment penalties, if you ask in time and keep to it. Interest still runs on the balance.
Can I appeal a VAT late payment penalty?
Yes. HMRC offers a review and you can appeal to the tax tribunal. A penalty may be cancelled or amended if you have a reasonable excuse.
Can I share a result?
Yes. The calculator gives a link with your answers in it, for example /vat-late-payment-penalty-calculator?owed=15000&due=2026-08-07&paid=2026-09-27.
Is this calculator from HMRC?
No. It's an independent calculator built from HMRC's published rules and rates. HMRC's figures in your VAT online account are the real ones.
Sources
We checked the facts on this page against these sources on 12 November 2026: