The rules this calculator uses
These are the rules for VAT periods starting on or after 1 January 2023, with the higher late payment rates HMRC has charged since 1 April 2025. Checked on 4 October 2026.
Paying late
| Days after the deadline | What HMRC charges |
|---|---|
| Up to 15 | No penalty. Interest only. |
| 16 to 30 | First penalty: 3% of the VAT still unpaid on day 15 |
| 31 or more | First penalty: 3% of what was unpaid on day 15, plus 3% of what was unpaid on day 30 |
| 31 or more | Second penalty: 10% a year, charged daily on the balance until you pay |
Interest is separate. It runs from the day after the deadline until you pay, at Bank Rate plus 4%, which is 7.75% today.
Before April 2025 the rates were 2%, 2% and 4% a year. The calculator uses the old rates if your payment deadline was before 1 April 2025.
Filing late
You get one point for each late return. When you reach the threshold, HMRC charges £200, and another £200 for every late return after that until you reset.
| You file | Threshold | On-time filing needed to reset |
|---|---|---|
| Annually | 2 points | 24 months |
| Quarterly | 4 points | 12 months |
| Monthly | 5 points | 6 months |
Below the threshold, each point expires after about 24 months. At the threshold, points only reset once you have filed on time for the whole period above and sent every return due in the last 24 months.
Worked example
A quarterly filer owes £8,000 due on 7 May 2026 and pays on 20 June 2026, 44 days late.
Day 15 penalty£8,000 × 3% = £240.00
Day 30 penalty£8,000 × 3% = £240.00
Second penalty£8,000 × 10% ÷ 365 × 14 days = £30.68
Interest£8,000 × 7.75% ÷ 365 × 44 days = £74.74
Total£240 + £240 + £30.68 + £74.74 = £585.42
Paying within 15 days would have cost about £25 in interest and no penalty at all.
Ways to cut the bill
- Pay what you can by day 15. Penalties are worked out on what is still unpaid on day 15 and day 30, so part payments reduce them.
- Ask for Time to Pay early. If HMRC agrees an arrangement and you stick to it, the penalty stops growing from the day you proposed it. Break the arrangement and HMRC charges as if it never existed.
- File even if you cannot pay. Late filing points are separate from late payment, and a nil or repayment return counts too.
- Appeal if you had a reasonable excuse, such as serious illness or an HMRC system failure. You have 30 days from the penalty notice.
What this calculator does not do
It assumes one amount unpaid from the deadline to the day you pay. If you made part payments, run it for each slice or check the figures in your HMRC VAT account. It does not cover the old default surcharge (periods before 2023), payments on account, or penalties for errors in a return.
Questions
What is the penalty for paying VAT 1 day late?
No penalty, only interest at 7.75% a year for each day. Penalties start if any VAT is still unpaid after day 15.
Is the late payment penalty 2% or 3%?
3% since 1 April 2025, at day 15 and again at day 30. The old 2% rate applies to earlier payments.
Do points ever disappear?
Yes. Below the threshold each point expires roughly 24 months after the month you filed late. At the threshold they all reset together once you meet the period of compliance.
Does a late nil return get a point?
Yes. Every return counts, including nil returns and returns where HMRC owes you money.