# The Finance Act 2021 (Increase in Schedule 26 Penalty Percentages) Regulations 2025, Note: Explanatory note


(This note is not part of the Regulations)
These Regulations increase the penalties for late payment of tax in Schedule 26 to the Finance Act 2021 (“Schedule 26”).
Where tax is not paid within the period of 15 days, beginning with the day after the day on which it fell due, a first penalty is payable under paragraph 5 of Schedule 26. If the tax is then paid, or a time to pay agreement is made, within a 30 day period, these Regulations increase that penalty from 2% of the unpaid tax to 3%. If the tax is not paid in full within the 30 day period, and there is no time to pay agreement, these Regulations increase the penalty from 2% of the tax unpaid at the end of the 15 day period and 2% of the tax unpaid at the end of the 30 day period to 3% of the amounts unpaid at the end of each of those periods.
A second penalty is payable, under paragraph 8 of Schedule 26, on tax which is unpaid at the end of the 30 day period. These Regulations increase that penalty from 4% of the outstanding tax per annum to 10%.
A Tax Information and Impact Note covering this instrument will be published on the website at https://www.gov.uk/government/collections/tax-information-and-impact-notes-tiins.

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Source: https://www.legislation.gov.uk/uksi/2025/589/note (the official version)
Page: https://openlegislation.uk/finance-act-2021-increase-in-schedule-26-penalty-percentages-regulations-2025/note
Contains public sector information licensed under the Open Government Licence v3.0. Source: legislation.gov.uk, The National Archives.