HMRC tax debt: the scale and the director risk
Total tax debt owed to HMRC stood at £42.8 billion at the end of 2024-25, against an average of around £15 billion in the five years before the pandemic (National Audit Office). HMRC will generally prefer an affordable Time to Pay arrangement over forcing a company under, provided the numbers put to them are realistic. National Audit Office
Data as of: end of 2024-25, NAO page published 11 May 2026
| Tax | Why arrears build | Director risk |
|---|---|---|
| VAT | Collected from customers but spent on cash flow | High: HMRC enforces VAT firmly |
| PAYE and NIC | Deducted from wages but not paid over | Personal Liability Notices possible for some NIC |
| Corporation Tax | Falls due after the year end on profits | Standard, but compounds with other arrears |
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HMRC is one of the most active creditors taking companies to court. If you owe HMRC and cannot pay in full, asking for a Time to Pay arrangement before enforcement starts usually keeps more options open than waiting.
General information, not advice about your company.
Methodology and source
The headline figure is from National Audit Office reporting on HMRC's management of tax debt. It covers all taxpayers, not only companies, so it sets the scale of the enforcement backdrop rather than measuring company arrears. HMRC would generally rather agree a realistic instalment plan than force a company under, which is why our Time to Pay affordability calculator exists. Where arrears are unaffordable, the company may need formal rescue or closure.
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