HMRC reveals £42.8 billion outstanding tax debt

by Aitch, posted in General

HMRC has revealed that it had £42.8 billion in outstanding tax debt at the end of March 2025, equivalent to 5% of total tax receipts. The figures appear in its corporate report, The HMRC tax debt strategy – update.

The report also highlighted progress in recovering unpaid tax, with HMRC resolving £48.7 billion of tax debt in the first two quarters of 2025-26, compared with £21.8 billion during the same period in 2019-20. HMRC said the outstanding debt balance had fallen as a proportion of tax receipts, despite growth in the tax base.

HMRC’s Tax Debt Strategy, published in October 2023, set out 4 strategic pillars to guide their approach to manage and resolve tax debt. The strategy is focused on preventing tax debt, tailoring interventions to taxpayers’ circumstances, improving debt recovery and being adaptable. Measures include payment reminders, improved and expanded digital services, more use of private sector debt collection agencies and additional debt management staff.

HMRC is also increasing its focus on older debts. The report states that debt more than a year old and not covered by a managed payment arrangement rose from £5.3 billion in 2020 to £18.8 billion in 2025. 

HMRC is also working to provide tailored support to taxpayers experiencing financial hardship or who have personal difficulties. Support can range from an extended time to pay arrangement to receiving one-to-one dedicated extra support.
 

Source:HM Revenue & Customs | 12-10-2026
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Aitch
I'm Aitch, the Founder and CEO of CIGMA Accounting Ltd. As a Chartered Management Accountant and as a CIMA member, I've spent more than 16 years helping businesses, entrepreneurs, landlords, and individuals with tax planning, accounting, and HMRC compliance. As a chartered accountant in London, I'm passionate about making complex tax matters easier to understand and helping clients make confident financial decisions. Over the years, I've advised start-ups, SMEs, established companies, and high-net-worth individuals across a wide range of tax and accounting matters. My expertise includes Corporation Tax, Self-Assessment, Capital Gains Tax, Inheritance Tax planning, R&D tax relief, capital allowances, international tax, and resolving complex HMRC compliance issues. Whether clients need a business accountant, tax accountant, or strategic tax advisor, my focus is always on delivering practical advice that creates long-term value. One of my specialist areas is Making Tax Digital (MTD). I've worked extensively with businesses preparing HMRC's digital reporting requirements, helping them move to cloud accounting, improve financial processes, and adopt technology that makes compliance more efficient. I regularly speak at Making Tax Digital roadshows, industry events, and educational sessions in collaboration with Zoho Books, sharing practical insights into digital accounting, tax legislation, and the future of the profession. Many business owners looking for the best accounting firm in London are not simply searching for an accountant they're looking for trusted advice, responsive support, and long-term value. That's the approach I've taken in building CIGMA Accounting. My team and I work closely with businesses across London and the UK, providing accounting services, tax advisory, bookkeeping, payroll, VAT, company accounts, and strategic tax planning tailored to each client's goals. Through this website, I share practical guidance on UK taxation, Making Tax Digital, HMRC updates, Corporation Tax, Self-Assessment, and business finance. My aim is to provide reliable, straightforward information that helps business owners understand changing regulations, reduce compliance risks, and make informed financial decisions with confidence.
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