Tax debt rises to £43.8bn as HMRC winding up petitions reach year high
New figures released today show that tax debt reached £43.8bn at the end of September 2025, a slight rise vs the end of June 2025 when tax debt levels stood at £42.6bn.
Meanwhile, HMRC winding up petitions reached a year high with 423 petitions filed in October, the highest monthly level since October 2024.
While tax debt as a proportion of total tax receipts fell from 5.2% in 2023-24 to 5.0% in 2024-25, this still represents nearly double the pre-pandemic rate.
HMRC says it is determined to reduce this further but levels remain stubbornly high.
Commenting on the figures, Dawn Register, a tax dispute resolution partner at BDO said: “By any measure, £43.8bn is an enormous amount of tax that remains uncollected. At last year’s Budget and this year’s Spring Statement, the government pledged a further £630m to boost HMRC’s ability to recover debt including an extra 2,400 debt management staff. While total tax debt may down £1bn since last year, the chancellor will be expecting to see bigger falls in future to give a better return on her investment.
“However, there are some signs that HMRC is getting tougher on businesses that are unable or unwilling to settle their tax debts. In October, we saw the highest level of winding up petitions filed with the courts so far this year. Feasibly we could see these levels rise over the coming 12 months.
“HMRC needs to strike the right balance between supporting businesses and individuals in genuine financial difficulty through Time to Pay arrangements, while being more assertive with those who can afford to pay but choose not to. These latest figures suggest there’s still significant room for HMRC to improve its debt collection effectiveness.”