Don’t Let Interest Pile Up: What You Need to Know About Late Tax Payments to HMRC in 2025
- Asia Bashir
- Apr 25
- 2 min read
We know that missing a tax payments can causes a lot of stress as well as additional interest charges from HMRC, which have increasing from April 2025. We wanted to share with you the new charges and how the work going forward.
How Does HMRC Interest Work?
If you don’t pay your tax bill on time, HMRC will charge interest starting from the original due date right up until the day they receive your payment. The longer the delay, the more interest you’ll pay—making your tax bill more expensive overall.
Updated Interest Rates from April 2025
From 6 April 2025, the interest rate on late payments rose to 8.5% per annum, reflecting the increase in inflation and the Bank of England’s base rate.
Can’t Pay on Time?
If you’re unable to pay your tax bill by the deadline, it’s important to act quickly. HMRC may agree to a formal Time to Pay arrangement, which can help spread the cost over time. Interest will still apply, but it's much better than ignoring the debt.
Avoiding payment without any agreement in place can result in penalties on top of the interest—making things much worse financially.
How We Can Help
At A to Z Finance Solutions Ltd, our goal is to ensure you're never caught off guard by a tax deadline. As your trusted accountants and tax advisors, we’ll keep you informed well in advance about what’s due and when—so you can plan ahead with confidence.
We help our clients stay on top of their obligations by:
Providing accurate tax estimates and actuals
Encourage clients to do more cashflow forecasting and get into better habits to put aside funds toward future tax payments
Advise clients to agree affordable payment plans with HMRC
With tax, planning and timing is everything. The sooner you speak to us, the more options you’ll have—and the easier it is to avoid interest charges and penalties.
Let’s plan ahead together. Reach out today for expert support you can count on.
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