Late payment interest cost taxpayers £80m in 2023, UHY finds

Late payment interest costs set back taxpayers £80m last year, as this year’s bill is expected to be much higher due to high interest rates, according to UHY Hacker Young, 

The firm revealed its insights on taxpayer interest costs after HMRC announced yesterday (1 February) that roughly 1.1 million people missed the self-assessment tax deadline. 

According to the firm, the HMRC issued a total of 79,081 fines last year to individuals due to their “failure to take reasonable care” whilst filling in their tax returns. 

A further 10,229 penalties were also issued for “deliberate errors” made on returns. 

Neela Chauhan, tax partner at UHY Hacker Young, said: “HMRC charges late payment interest to ensure taxpayers pay their self-assessment tax on time. 

“Individuals who might struggle to pay their tax on time will be hit by penalties unless they negotiate a ‘Time to Pay’ arrangement with HMRC.”

She added: “Errors on tax returns – even genuine mistakes – can add a huge cost to your tax bill and even put you at risk of a full tax investigation by HMRC.”