With the figure expected to rise even further, it could become the fourth year in which the tax owed by those who’ve missed the late payment deadline has seen an increase.
According to accountancy group UHY Hacker Young, £1.83bn was owed in 2016/17, rising from £1.76bn the previous period and £1.65bn in 2014/15.
The group suggests that tough economic conditions may have been a factor in increasing late payments as “individuals are squeezed” and finding it harder to pay their tax bills.
Neela Chauhan, partner at UHY Hacker Young said that taxpayers face a “lose-lose scenario” if they find it hard to pay their taxes on time.
“They could either choose to pay the full amount on time, risking the long-term health of their business or career because of the hit on their cashflow, or accept a potentially hefty fine further down the line,” she said.
There has also been an increase in self-employed individuals across the UK over recent years and the customer base for HMRC has been steadily on the rise over the period in question.
As of March 2019, there was a record high of 4.93 million self-employed individuals across the UK.
Chauhan predicted that as the number of self-employed individuals increases so will the money owed through late payments.
UHY Hacker Young also noted a decrease in the amount of tax cancelled, from 23% (£523m) in the previous period to 22% (£516m).
The number of penalties adjusted to nil or cancelled has decreased year-on-year for the past five years.
“Many commentators have suggested that HMRC is becoming increasingly aggressive when chasing down debts,” Chauhan said, adding that more flexibility when managing payments was something taxpayers wanted to see.
A spokesperson for HMRC said the Revenue would prefer that individuals pay on time rather than receive penalties.
“If customers are unable to pay on time, they may avoid penalties by contacting HMRC as soon as possible and we can discuss whether it might be possible to set up a payment plan,” they added.
In August last year, the Revenue was criticised last year for being “grossly unfair” after it increased its late payment tax payment rate from 3% to 3.25% but failed to do the same in its interest repayment rate.
In January, HMRC issued an apology after admitting to fining more than 650 taxpayers for late payments by mistake.