Questions and Answers
What interest will I be charged if I pay my tax late?
I don’t believe I will be able to pay my tax liability and wondered what interest HMRC will charge on the underpaid tax?
It's really important to try to pay your taxes on time. HM Revenue & Customs (HMRC) will charge interest on the late paid tax.
The current late payment and repayment interest rates applied to the main taxes HMRC charges and pays interest on are:
- late payment interest rate — 7.75% from 22nd August 2023
- repayment interest rate — 4.25% from 22nd August 2023
As well as being aware of the fines and penalties which apply when a tax return is submitted late, you should also remember that HMRC also charge penalties for late payment of tax as follows:
- 30 days late – 5% of tax due.
- More than 5 months after the first penalty – 5% of outstanding tax due at that date.
- More than 11 months after the first penalty – 5% of outstanding tax due at that date.
Where you can't pay your tax bill on time in full, you may be able to set up a ‘Time to Pay’ payment plan to pay it in instalments, and this can help mitigate your exposure to penalty charges. Early contact with HMRC is advisable to prevent enforcement action being taken against you.
If you’re struggling to keep on top of your tax affairs, please contact us and we would be happy to take care of them on your behalf – leaving you to concentrate on running your business.
Frequently Asked Questions
If you can’t pay your tax bill in full by the due date, it's important that you contact HMRC as soon as possible. You may be able to arrange a Time to Pay agreement, which allows you to pay in instalments as agreed by HMRC.
You can pay the tax you owe online through ROS with a debit or credit card.
Date published 10 Jan 2023 | Last updated 8 Oct 2024
This article is intended to inform rather than advise and is based on legislation and practice at the time. Taxpayer’s circumstances do vary and if you feel that the information provided is beneficial it is important that you contact us before implementation. If you take, or do not take action as a result of reading this article, before receiving our written endorsement, we will accept no responsibility for any financial loss incurred.Choose the right accounting firm for you
Running your own business can be challenging so why not let TaxAssist Accountants manage your tax, accounting, bookkeeping and payroll needs? If you are not receiving the service you deserve from your accountant, then perhaps it’s time to make the switch?
Local business focus
We specialise in supporting independent businesses and work with 100,000 clients. Each TaxAssist Accountant runs their own business, and are passionate about supporting you.
Come and meet us
We enjoy talking to business owners and self-employed professionals who are looking to get the most out of their accountant. You can visit us at any of our 409 locations, meet with us online through video call software, or talk to us by telephone.
Switching is simple
Changing accountants is easier than you might think. There are no tax implications and you can switch at any time in the year and our team will guide you through the process for a smooth transition.