UK VAT Late Submission and Late Payment Penalty Calculator
Work out what a late VAT return and a late VAT payment could cost under HMRC's points based penalty system, which applies to VAT accounting periods starting on or after 1 January 2023. Every line of the result shows the rule that produced it.
Your position
Assumptions this calculator makes
- The full amount stays unpaid until you settle it in one payment on the day entered. Part payments would reduce the day 30 penalty, the second penalty and interest.
- The second penalty and interest are approximated with simple daily accrual on an actual/365 basis, at one constant rate for the whole period. HMRC applies base rate changes from their effective dates, so long periods can differ.
- Interest is estimated on the unpaid VAT only. HMRC also charges interest on penalties that are themselves paid late, which is not modelled here.
- Payment on day 15 counts as within 15 days, and payment on day 30 avoids the second 3%; the extra 3% and the daily second penalty start once the amount is still unpaid at day 31.
- The Time to Pay option assumes the arrangement was proposed within days 1 to 15, accepted by HMRC, and kept to. A broken arrangement restores penalties as if it had never existed, and Time to Pay never stops interest.
- Each line is rounded to the penny and the total is the sum of the rounded lines, so it may differ from HMRC's figure by a few pence.
- Penalty point expiry and reset are not modelled. Below the threshold a point normally expires 24 to 25 months after the relevant deadline; at the threshold you need a full period of compliance to reset to zero (see the FAQ).
- Rates reflect the position at August 2026: the late payment penalty rates that apply from April 2025 (3%, a further 3%, then 10% per year) and the interest margin of base rate plus 4% that applies from 6 April 2025.
Frequently asked questions
How do VAT late submission penalty points work?
For VAT accounting periods starting on or after 1 January 2023, HMRC gives you one penalty point each time a VAT return is submitted late. When you reach your points threshold you receive a £200 penalty, and a further £200 penalty for every subsequent late return while you remain at the threshold. The threshold is 2 points for annual filers, 4 points for quarterly filers and 5 points for monthly filers.
What is the penalty for paying VAT late?
If you pay in full, or propose a Time to Pay arrangement that HMRC accepts, within 15 days of the due date, there is no late payment penalty. From day 16 a first penalty of 3% of the VAT unpaid at day 15 applies. If any VAT is still unpaid after day 30, a further 3% of the amount outstanding at day 30 is added, making 6% in total; paying in full on day 30 avoids the second 3%. From day 31 a second penalty accrues daily at 10% per year on the outstanding balance until it is paid. These rates apply from April 2025; late payment interest is charged on top.
How much interest does HMRC charge on late VAT?
HMRC charges late payment interest at the Bank of England base rate plus 4% (the margin that applies from 6 April 2025), from the first day the payment is overdue until it is paid in full. With the base rate at 3.75%, the HMRC late payment interest rate is 7.75% per year. Interest is charged even if you have a Time to Pay arrangement in place.
Do VAT penalty points expire?
Yes. If you are below your threshold, each point normally expires on the last day of the month 24 months after the return deadline it relates to (25 months if the deadline fell on the last day of a month). If you have reached your threshold, points only reset to zero after a period of full compliance: 24 months of on time returns for annual filers, 12 months for quarterly filers or 6 months for monthly filers, and you must also have submitted all returns due in the previous 24 months. Details are on GOV.UK.
Does a Time to Pay arrangement stop VAT penalties?
If you propose a Time to Pay arrangement within 15 days of the due date, HMRC accepts it and you keep to its terms, you avoid both late payment penalties. Proposing one later can still reduce the penalties, because the penalty clock stops from the date you propose the arrangement. Time to Pay does not stop late payment interest, which continues until the VAT is paid, and it has no effect on late submission penalty points.