Businesses are falling behind on their tax bills, with HMRC chasing an average of £28 billion in unpaid debts each month during the first quarter of 2025, and the situation could worsen.
Figures obtained via a Freedom of Information request show that corporation tax, VAT, and PAYE arrears remain stubbornly high. HMRC pursued unpaid corporation tax in January, February, and March, averaging £7bn a month. VAT arrears were even higher, averaging £12bn, with February the worst month at £12.55bn.
Late PAYE payments – which include National Insurance contributions – reached an average of £8bn per month. In January, £8.71bn was unpaid, followed by £8.51bn in February and £8.16bn in March.
These figures come just as a rise in employer National Insurance kicks in. From April 2025, the rate increased by 1.2% to 15%, while the threshold for liability fell to £5,000. This change will affect over a million low-paid workers and further strain business budgets.
In addition to domestic pressures, international headwinds are also building. Despite a recent mini trade deal between the UK and US – covering sectors such as automotive, agriculture and steel – new US tariffs are expected to hit business cashflow.
As costs mount and economic uncertainty continues, many companies are facing a difficult year ahead as they try to meet their tax obligations.
Chat to us about your business.
