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HMRC Late Payment Interest: Rate and Example

Short answer: According to GOV.UK (page updated 23 December 2025), HMRC's late payment interest rate was 7.75% from 9 January 2026 (Bank of England base rate plus 4%, in force since 6 April 2025). The rate can change when the base rate changes, so check the current rate on GOV.UK before paying. For Self Assessment, HMRC's manual says interest normally runs from the statutory due date. Interest is separate from penalties.

The rates GOV.UK lists

• Late payment interest: base rate + 4%, 7.75% from 9 January 2026 (8.00% from 27 August 2025; 8.25% from 28 May 2025; 8.50% from 6 April 2025).
• Repayment interest (when HMRC owes you): base rate − 1%, floor 0.5%, 2.75% from 9 January 2026.
• This table covers Income Tax, National Insurance, Capital Gains Tax and VAT (periods from 1 January 2023).

HMRC's news item of 19 December 2025 explained the move after the Bank of England cut to 3.75%.

Which Self Assessment dates start interest?

HMRC's Self Assessment Manual (SAM60080, read as a search excerpt) lists statutory due dates: first payment on account 31 January during the tax year, second 31 July after it, balancing payment 31 January after it. The SALF305 manual page says interest arises on any tax paid late, including income tax, NICs, CGT and student loan repayments. A claim to reduce payments on account does not change the due dates.

Worked example (made-up, simple illustration)

Balancing payment of £1,000 unpaid after 31 January 2027, paid 31 days later, at 7.75%: £1,000 × 7.75% × 31 ÷ 365 ≈ £6.58. HMRC's own calculation and any rate change may give a different figure; use your HMRC statement.

Check the current rate

The page we read is dated 23 December 2025 and shows no change after 9 January 2026. We could not confirm that 7.75% is the rate in force on 17 October 2026, because the rate follows the Bank of England base rate. Check the current figure on GOV.UK before paying.

Interest vs penalties

Interest is charged on unpaid tax; the 5% late-payment penalties at 30 days, 6 and 12 months are a separate matter. See missed deadline penalties. If you cannot pay, see Time to Pay and payments on account.

FAQ

Do I earn interest if I overpay? GOV.UK lists a repayment rate (2.75% from 9 January 2026), a separate table from late payment.

Is interest tax-deductible? Not covered by the sources we read.

What we could not verify

• Whether 7.75% is the rate in force today (the page is dated 23 December 2025; the Bank of England base rate was not checked).
• Exact HMRC interest compounding/rounding method.
• SAM60080 and SALF305 were read as search excerpts, not in full.

Sources (official)

• GOV.UK, HMRC interest rates for late and early payments — https://www.gov.uk/government/publications/rates-and-allowances-hmrc-interest-rates-for-late-and-early-payments/rates-and-allowances-hmrc-interest-rates (read in full 17 October 2026; updated 23 December 2025)
• GOV.UK, HMRC revises interest rates for late payments (19 December 2025) — https://www.gov.uk/government/news/hmrc-revises-interest-rates-for-late-payments (search excerpt 17 October 2026)
• HMRC, Self Assessment Manual SAM60080 — https://www.gov.uk/hmrc-internal-manuals/self-assessment-manual/sam60080 (search excerpt 17 October 2026)
• HMRC, SALF305 — https://www.gov.uk/hmrc-internal-manuals/self-assessment-legal-framework/salf305 (search excerpt 17 October 2026)

Deadlines calendar → Penalty estimator →

Not tax advice. See the disclosure.