HMRC is reducing the interest charged on overdue tax payments from 7.25% to 7% as of 17th February, providing relief to around 1.1 million taxpayers who missed the January 31 filing deadline. However, the interest paid on tax refunds remains at 3.5%, creating a notable disparity between what is charged on late fees versus what is refunded. Critics highlight that this imbalance, alongside stringent penalties for unpaid bills, places added pressure on taxpayers, meriting government action to address the issue.
From 17th February, taxpayers with overdue debts will see the interest rate on late payments drop from 7.25% to 7%, offering some relief.
The difference between HMRC's interest on late payments and refunds demonstrates a significant imbalance, with penalties on late tax bills remaining strict.
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