Millions warned to brace for HMRC rule change which kicks in Sunday

Artistic representation for Millions warned to brace for HMRC rule change which kicks in Sunday

The Labour Party government tax office is set to charge 8.5 per cent on outstanding bills from 6 April. The incoming 2025/26 tax year brings with it a hike to the interest rate HMRC charges on late payments.

25% interest rate charged on late payments.

  • A taxpayer who owes £1,000 in tax and pays it 30 days late will be charged 8.25% interest, resulting in an additional £82.50 in interest.
  • In contrast, a taxpayer who receives a tax refund of £1,000 will be charged 3.5% interest, resulting in an additional £35 in interest.
  • This disparity highlights the issue of HMRC’s interest rate on late payments being significantly higher than the interest rate charged on tax refunds.
    The Consequences of HMRC’s Interest Rate Policy

    • The high interest rate charged on late payments can have severe consequences for taxpayers who are struggling to pay their tax bills.

    Key Developments

    The Spring Statement, a key economic policy document, was released by the UK government, outlining its plans for the upcoming financial year.

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