Out-Law News 1 min. read
HMRC imposes interest on late paid alcohol duty
Whiskey glasses. Jeff Mitchell/Getty Images
15 Aug 2025, 1:45 pm
Businesses liable for alcohol duty in the UK will face interest charges on late payment of that duty to HM Revenue and Customs (HMRC) from next month, an expert has warned.
Under rules taking effect from 1 September, HMRC will levy an 8% interest charge on alcohol duty which is paid late
The change brings alcohol duty in line with other taxes – but marks the first time that interest has been payable on late paid alcohol duty. HMRC has stated that it is in a position to introduce interest following the substantial reforms to alcohol producer registration and the move to returns using an online system that took effect from 1 March 2025.
Jake Landman, a tax expert with Pinsent Masons, said: “While potential geared civil penalties for certain duty payment failures have applied for some time, this new obligation to pay interest on alcohol duty - including in relation to self-assessment errors - harmonises the interest position with most other taxes.”
He added: “This will act as an additional incentive for taxpayers to get their alcohol duty returns right first time, so that interest, which can accrue quickly at 8%, does not start to run.”
The interest charge imposed by HMRC is liable to change over time as it is dependent on the Bank of England base rate. HMRC will charge 4% more that the base rate for late payments.
As part of the new rules change, HMRC will also be liable for repayment interest when it returns overpaid alcohol duty back to taxpayers. However, this will only be at a 3% rate rather than the 8% taxpayers face. This is because repayment interest is set at 1% lower than the base rate.
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