Increasing late payment interest encourages taxpayers to pay on time, helps raise vital revenue for public services, and ensures fairness for those who pay on time, and forms part of a wider package of measures to close the gap between tax owed and tax paid.
UK GVT will be increasing the rates charged by UK HMRC on unpaid tax liabilities by 1.5 percentage points, effective Apr. 6, 2025, as announced at Autumn Budget 2024.
UK HMRC keeps its interest rates under review and thus following this increase the late payment interest rates will still remain low compared to current commercial borrowing.
This increase is essential part of package of measures to drive down the debt balance.
Effectiveness
The changes to late payment interest rate is applicable to tax due from Apr. 6, 2025.
