HMRC takes £137 million in late payment interest

HMRC has taken in over £137 million from late payment interest so far for 2023/24, a freedom of information request from investment platform AJ Bell shows. 

The tax authority has charged 1.3 million taxpayers late payment interest for the last tax year with the average interest payment standing at just over £100.

The figures only count taxpayers once the interest accrued or late filing penalty has been paid, meaning the figures for the 2023/24 tax year will likely be significantly higher than they are now.

This can be evidenced by looking back to 2022/23, where the total amount paid has jumped by over 30% in the last year to just over £200 million.

The sums have risen since HMRC hiked late payment interest rate to 4% above the Bank of England base rate from 6 April 2025.

Charlene Young, senior pensions and savings expert at AJ Bell, said:

'These latest figures suggest that taxpayers still face difficulty navigating the UK's complex tax system and HMRC are cashing in as a result.

'Millions have paid late payment interest in recent tax years, despite moves to relax the rules on who must file a self-assessment return.

'Taxpayers can become unstuck if they find the systems and deadlines difficult to navigate, and others potentially face higher interest and penalties when it comes to mistakes and not paying on time.'