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Late payment penalties are charges incurred if you don’t pay your taxes and duties by their due dates.

Late payment penalties consist of:

  • initial penalties for paying tax late, and
  • monthly incremental penalties on any amounts that remain unpaid.

Late payment penalties start from the day after the due date for payment:

  • If the tax due is increased as the result of a reassessment, a new due date will generally be set for paying the newly assessed tax.
  • There will be no late payment penalty imposed on the newly assessed tax if it’s paid by the new due date.

Grace period:

  • If this is your first late payment in a two-year period, you will be allowed a grace period.
  • This means that you will have a further period to make payment.
  • If you do not pay, the late payment penalty will be imposed from the due date.
  • Interest will continue to apply.

If you need help in understanding this or any other tax topic, and how it relates to your business please

If you’d like to know more, contact your nearest SBA branch

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