Late with Tax? HMRC Will Now Charge You 8.5% Interest

Paying tax is something we all have to do – like it or not. But leaving it too late can quietly cost you more than you’d expect.

If your tax payment to HMRC slips past the deadline, they won’t just send you a polite reminder – they’ll start adding interest from the day it was due until the day you settle. The longer it sits unpaid, the more it grows.

As of 6 April 2025, that interest rate has climbed to 8.5% per year, keeping pace with inflation and the Bank of England’s base rate. It’s not a number to ignore.

On the flip side, if you overpay, HMRC will actually pay you interest. Granted, it’s at a lower rate – 3.5% since 25 February 2025 – but still, it’s a small win for being organised.

Now, life happens. And there might be times when paying on time just isn’t possible. If that’s the case, ignoring it isn’t the answer. HMRC is far more understanding if you pick up the phone and arrange a formal ‘time to pay’ plan. Do that, and you’ll avoid extra penalties and keep the interest at a more manageable level.

Where do we fit in?

Whether we already handle your tax affairs or you’re just realising you could use a bit of support, we’re here to make sure surprises are kept to a minimum. We’ll remind you when payments are due, help you figure out what’s owed, and if needed, we can speak to HMRC on your behalf to sort out a payment plan.

If you're ever unsure, don’t wait until the deadline is breathing down your neck – give us a call on 01709 589 439. A quick conversation now could save you a lot later down the line.