HMRC owed £43.8billion by 8.2 million taxpayers
Summarised from 2 outlets · Updated 23 Oct, 13:02 · Archive
HMRC is owed £43.8 billion in unpaid tax by 8.2 million taxpayers, with cost-of-living pressures making recovery harder.
The National Audit Office has warned that HMRC faces a £43.8 billion tax debt crisis, with 8.2 million taxpayers owing money at the end of the 2025-26 financial year. This total represents 4.7% of all tax receipts. The problem is worsening as debts age, with more than half the total tax debt balance over a year old by the end of the financial year, compared with just 28% at the end of 2019-20.
Tax debt more than a year old and not covered by a payment plan has soared from £5.3 billion before the Covid pandemic to £18.6 billion at the end of 2025-26. The spending watchdog attributed the problem increasingly to cost-of-living pressures making it harder for some people to settle their bills. HMRC estimates that 46% of the outstanding tax debt balance may never be paid.
The proportion of tax receipts represented by unpaid tax has fallen from a peak of 9.3% at the end of 2020-21, when HMRC paused debt enforcement during the pandemic, to 4.7% in 2025-26. However, the overall balance remains significantly above pre-pandemic levels, raising questions about the tax authority's collection effectiveness.
How it is being reported
- HMRC faces £43.8billion tax debt crisis as millions struggle to pay billsHMRC was owed £43.8billion by 8.2 million taxpayers at the end of 2025-26, with a watchdog warning that older unpaid tax debts are harder to recover.Oxford Mail · 23 Oct, 12:39
- HMRC faces £43.8billion tax debt crisis as millions struggle to pay billsHMRC was owed £43.8billion by 8.2 million taxpayers at the end of 2025-26, with a watchdog warning that older unpaid tax debts are harder to recover.Oxfordshire Guardian · 23 Oct, 12:39
In this story: HMRC · National Audit Office · UK
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