Use this VAT late payment penalty calculator to work out what HMRC charges when a VAT bill isn’t paid on time, at HMRC’s current rates. Find your figure in the ready reckoners, or follow the four steps for an exact amount.
The penalties apply to VAT periods starting on or after 1 January 2023. HMRC also charges interest from the first day the VAT is overdue. The figures here are estimates; HMRC’s own calculation is final.
HMRC charges two penalties, and both depend on how many days the VAT is overdue:
These rates have applied since 1 April 2025. Before then they were 2%, 2% and 4% a year. HMRC sets out the rules in how late payment penalties work if you pay VAT late.
The penalties don’t apply to VAT payments on account, or to instalments under the VAT Annual Accounting Scheme.
The first 15 days matter most. A VAT loan decision normally comes within 24 hours, and HMRC is paid directly, so a UK limited company that arranges a loan in that window can pay HMRC before any penalty applies. Call 01494 956 871 to talk it through.
Penalties only, if none of the VAT is paid until the day shown:
| VAT unpaid | 16–30 days late | 31 days late | 45 days late | 60 days late | 90 days late |
|---|---|---|---|---|---|
| £5,000 | £150.00 | £301.37 | £320.55 | £341.10 | £382.19 |
| £10,000 | £300.00 | £602.74 | £641.10 | £682.19 | £764.38 |
| £25,000 | £750.00 | £1,506.85 | £1,602.74 | £1,705.48 | £1,910.96 |
| £50,000 | £1,500.00 | £3,013.70 | £3,205.48 | £3,410.96 | £3,821.92 |
| £100,000 | £3,000.00 | £6,027.40 | £6,410.96 | £6,821.92 | £7,643.84 |
For other amounts, use the cost per £1,000 unpaid and multiply up:
| Per £1,000 unpaid | 16–30 days | 31 days | 60 days | 90 days | 120 days | 180 days | 365 days |
|---|---|---|---|---|---|---|---|
| Penalties | £30.00 | £60.27 | £68.22 | £76.44 | £84.66 | £101.10 | £151.78 |
| Penalties plus interest at 7.75% | £33.40 (at day 16) | £66.86 | £80.96 | £95.55 | £110.14 | £139.32 | £229.28 |
From day 31, each extra day adds about 27p per £1,000 in penalties, plus the interest.
Penalties plus late payment interest, assuming HMRC’s rate stays at 7.75% (its rate from 9 January 2026) for the whole period. Check the current rate in HMRC’s interest rates table.
| VAT unpaid | 20 days late | 31 days late | 45 days late | 60 days late | 90 days late |
|---|---|---|---|---|---|
| £5,000 | £171.23 | £334.28 | £368.32 | £404.79 | £477.74 |
| £10,000 | £342.47 | £668.56 | £736.64 | £809.59 | £955.48 |
| £25,000 | £856.16 | £1,671.40 | £1,841.61 | £2,023.97 | £2,388.70 |
| £50,000 | £1,712.33 | £3,342.81 | £3,683.22 | £4,047.95 | £4,777.40 |
| £100,000 | £3,424.66 | £6,685.62 | £7,366.44 | £8,095.89 | £9,554.79 |
These totals, and the per-£1,000 figures above, leave out the interest HMRC also charges on penalties that aren’t paid on time, so treat them as a minimum.
For the four standard VAT quarters. The deadline is one calendar month and seven days after the quarter ends; day 1 is when late payment interest starts. Day 16 is when the first 3% penalty applies to whatever was unpaid at day 15. Day 31 adds a further 3%, and the daily 10%-a-year second penalty starts on whatever is still unpaid.
| Quarter ends | Payment deadline | Day 1 (interest) | Day 16 (first 3%) | Day 31 (second 3% and daily penalty) |
|---|---|---|---|---|
| 31 March | 7 May | 8 May | 23 May | 7 June |
| 30 June | 7 August | 8 August | 23 August | 7 September |
| 30 September | 7 November | 8 November | 23 November | 8 December |
| 31 December | 7 February | 8 February | 23 February | 10 March (9 March in a leap year) |
If your VAT quarters end in other months, count from your own deadline in the same way. See when a UK company has to pay a VAT bill.
The total of steps 2 to 4 is the penalty. To add interest, multiply the VAT unpaid by HMRC’s interest rate, divide by 365, and multiply by the days late.
To use it as a calculator in Excel or Google Sheets, put the days late in cell A2 and the VAT unpaid in cell B2, then enter this formula in any other cell. It assumes the whole amount stays unpaid, and it gives £986.30 for HMRC’s example below:
=IF(A2>=16, 0.03 * B2, 0) + IF(A2>=31, 0.03 * B2 + B2 * 0.1 * (A2-30) / 365, 0)
HMRC gives this example. A business pays a VAT bill of £15,000 in full, 51 days late:
| Part | Calculation | Amount |
|---|---|---|
| First penalty, day 15 | 3% × £15,000 | £450.00 |
| First penalty, day 30 | 3% × £15,000 | £450.00 |
| Second penalty, days 31 to 51 | £15,000 × 10% × 21 ÷ 365 | £86.30 |
| Total penalties | £986.30 |
Each part of the penalty is worked out on the VAT still unpaid at that point. In this hypothetical example, a £20,000 bill is paid in two halves: £10,000 on day 20, and the rest on day 45.
| Part | Calculation | Amount |
|---|---|---|
| First penalty, day 15 | 3% × £20,000 | £600.00 |
| First penalty, day 30 | 3% × £10,000 | £300.00 |
| Second penalty, days 31 to 45 | £10,000 × 10% × 15 ÷ 365 | £41.10 |
| Total penalties | £941.10 |
HMRC charges late payment interest from the first day the VAT is overdue until it’s paid in full, at the Bank of England base rate plus 4% (HMRC’s guidance on late payment interest). The rate changes when the base rate changes. Two points are easy to miss:
Take the total from the penalties-plus-interest table for the time it will take you to pay, and compare it with the total amount repayable on a VAT loan. Include anything else a late payment could affect, such as your time dealing with arrears. What is a VAT loan? explains how the finance works. VAT Loans is a credit broker, not a lender, and finance is subject to status, affordability and lender approval.
No. If the VAT is paid in full within 15 days of the deadline, there’s no late payment penalty. Late payment interest still applies from the first day.
No. Penalty points are for sending a VAT return late. Late payment penalties are for paying the VAT late, and they’re charged separately. Each late return adds a point. Once you reach the threshold (2 points for annual returns, 4 for quarterly and 5 for monthly), HMRC charges a £200 penalty, and a further £200 for each late return while you stay at the threshold (penalty points for late VAT returns).
VAT payments on account, and instalments under the VAT Annual Accounting Scheme. The penalties also only apply to VAT periods starting on or after 1 January 2023; earlier periods were covered by the old default surcharge.
Yes, in some cases. HMRC says a penalty may be cancelled or amended if you have a reasonable excuse. You can ask HMRC for a review, or appeal to the tax tribunal. A Time to Pay arrangement can also mean lower, or no, penalties.
No. Loans and loan interest are exempt from VAT. See is there VAT on loans?
Rates and examples checked against gov.uk in September 2026. Written by the VAT Loans team. Last reviewed September 2026.
