Quick answer
If you’re in MTD for Income Tax and pay late, there’s no penalty for the first 15 days. In 2026/27, a 3% penalty applies to tax still unpaid at day 15 (unless it’s your first year), another 3% at day 30, then 10% a year from day 31. From 2027/28 the 3% rates rise to 4%. Interest is charged from the first day.
2026/27 tax year
Days late | Penalty |
|---|---|
1 to 15 | None |
16 to 30 | 3% of tax owed at day 15, or none in your first year |
31 or more | 3% at day 15 plus 3% of tax owed at day 30, plus 10% a year on the outstanding tax, charged daily for up to 2 years |
From 2027/28
The percentages at day 15 and day 30 rise from 3% to 4%. The 10% yearly rate from day 31 stays the same.
Interest
Late payment interest is charged separately, from the first day your payment is late, until it’s paid.
Avoiding penalties
Pay in full by 31 January and 31 July.
If you can’t pay, contact HMRC before day 15 about a Time to Pay arrangement.
Use your in-year tax estimate to set money aside.
Late submission penalties work differently. See MTD penalties.