Duty Deferment Interest Calculator

Estimate interest on a late duty deferment payment for customs duty, import VAT or excise amounts. Enter the deferred balance, missed payment date, payment date and annual interest rate to see a daily breakdown.

Late Payment Details

Deferred amount Amount not collected or paid on time.£ Annual interest rate Enter the relevant HMRC late payment rate for the period.% Days late Use exact days between due date and payment date.days Day-count method HMRC interest is commonly calculated daily. Partial payment made Optional payment already made before the final date.£ Partial payment after Days late when the partial payment was made.days

Estimated Interest

£37.16

This is an estimate based on simple daily interest. Check the actual HMRC notice, rate and due date.

This estimate is useful because it shows the daily cost of delay and the effect of partial payment timing. It is arithmetic support only; account notices, rate changes and payment allocation still need checking against HMRC records.

Daily interest before partial payment£2.65

Interest before partial payment£37.16

Interest after partial payment£0.00

Balance after partial payment£12,500.00

Total amount with interest£12,537.16

What This Calculator Is For

Cash planning

Estimate the interest cost when a deferment direct debit, guarantee, bank issue or internal approval problem delays payment.

Invoice check

Compare a notice or internal recharge against a simple daily-interest model before asking HMRC, a broker or a finance team for detail.

Not a decision notice

The calculator does not decide liability, penalties, guarantee action, suspension or compliance treatment. It is arithmetic support only.

How to Use the Calculator

Enter the deferred amount that was not paid on time. This may be customs duty, import VAT, excise duty or another amount collected through a duty deferment account. Enter the annual rate that applies to the period. HMRC interest rates can change, so do not treat a saved calculator result as current forever. If the late period crosses a rate change, split the calculation into two or more periods and add the interest amounts.

Enter days late as the number of calendar days from the due date to the payment date. If part of the balance was paid before the final payment date, enter the partial payment and the day it was made. The calculator then charges interest on the full amount up to that day, and on the remaining balance after that day.

Use the result as a working estimate. HMRC systems may calculate interest by exact statutory rules and may apply separate notices, penalties or account action. For a formal dispute, keep the deferment statement, direct debit record, payment reference, bank evidence, broker instruction and HMRC notice together.

Formula and Method

daily rate = annual interest rate / day-count basis

daily interest = outstanding balance x daily rate

interest before partial payment = original balance x daily rate x days before partial payment

remaining balance = original balance - partial payment

interest after partial payment = remaining balance x daily rate x remaining late days

total interest = interest before partial payment + interest after partial payment

total amount with interest = remaining balance + total interest

This page uses simple daily interest and rounds displayed money to the nearest penny. If the real calculation includes rate changes, different start dates, payment allocation rules or adjustments, use HMRC’s figures as the record to respond to.

When to Split the Calculation

Situation	Why one line may be wrong	Better method	Evidence to keep
Interest rate changed during the late period	One annual rate will overstate or understate part of the period.	Run one calculation for each rate period and add them.	HMRC rate table and dates.
Partial payment was made	Interest should usually reduce after the partial payment date.	Use partial payment fields or split into before and after periods.	Bank payment and HMRC allocation.
Several deferment statements are late	Each may have a different due date and balance.	Calculate each statement separately.	Statements, direct debit notices and payment references.
Broker or agent error is being reviewed	The payer may need to show timing, instruction and authority.	Calculate interest, then separate commercial responsibility.	Emails, instructions and agency terms.

Practical Checks Before Paying or Querying

Check the due date: Interest depends on the correct due date, not the date someone noticed the problem.
Check the rate: HMRC late payment interest rates change. Use the rate for each day of the late period.
Check allocation: A payment may have been allocated to another debt or period.
Check direct debit status: Duty deferment account issues can arise from mandate, limit, guarantee or bank problems.
Keep a clean audit trail: Store notices, statements, payment proofs and internal approvals together.

Worked Example

A company has a deferred balance of £12,500 that is paid 14 days late. The annual late payment interest rate entered is 7.75% and the 365-day method is used. The daily interest is about £2.65. Over 14 days, the estimated interest is £37.16. The total amount needed to clear the balance and interest is about £12,537.16.

If the company paid £5,000 after 7 days and the rest after 14 days, interest would run on £12,500 for the first 7 days and £7,500 for the next 7 days. That is why partial payment timing matters.

Record Keeping and Rate Changes

When a deferment payment is late, the arithmetic is only one part of the job. The account holder usually needs a clean record showing the amount due, the original collection date, the actual payment date, the bank reference and any contact with an agent or HMRC. If a broker arranged the entry, keep the entry number and import paperwork with the finance record so that the payment can be linked to the correct import period.

Interest rates can change between the missed date and the payment date. A single rate is suitable only when the full late period sits inside one rate period. If HMRC changed the late payment interest rate halfway through, run the first part with the old rate, run the second part with the new rate, and add both results. This produces a better estimate before you compare it with an official notice or internal recharge.

FAQ

Does this include penalties?

No. It estimates interest only. Penalties, account suspension, guarantee action or other charges need separate review.

Which interest rate should I use?

Use the official HMRC rate that applies to the late payment period. If the rate changed during the period, split the calculation.

Can I use this for import VAT?

Yes for a simple interest estimate on an overdue deferred import VAT amount, but check the exact HMRC notice and account rules.

What if the rate changed while payment was late?

Run the calculation for each rate period separately and add the results. One rate across the full delay can be misleading.

Does a partial payment stop interest?

It can reduce interest after the payment date, but only for the amount actually allocated to that balance. Check the allocation record.

Sources

GOV.UK (2026) ‘Duty deferment‘. UK Government.
HM Revenue and Customs (2026) ‘HMRC interest rates for late and early payments‘. UK Government.
GOV.UK (2026) ‘Check how to pay duties and VAT on imports‘. UK Government.