Taxman collects more than £400m in interest charges
Newsletter issue – March 2025
The amount the tax man collects from interest charges has grabbed some media attention in recent weeks, as new data was published.
Following a Freedom of Information request, it was revealed that HMRC received more than £400m purely from interest charges in the last calendar year (January to December 2024).
This figure includes money that has come from taxpayers, trusts and estates that missed payment deadlines.
Incredibly, the figure has risen to three times greater than it was in 2021 - when revenue stood at £131.9m. For 2022, the figure was £200m, followed by £328m in 2023.
The late payment interest rate rose significantly over the three year period that the figures covered, going from 2.6% in December 2021 to 7.75% (the peak) in August 2024. It's supposed to fall again in the coming weeks to 7%.
Analysts said that, aside from the increasing interest rate, another reason for the amount collected rising was due to higher numbers of self-employed people paying self-assessment tax returns in 2024.