As companies face increased national insurance (NI) costs and the economic impact of U.S. tariff hikes, they owe UK HM revenue and customs (HMRC) an average of £28 billion ($37.54 billion) in business debts.

These figures were obtained by HMRC through the Freedom of Information Act, highlighting the outstanding debts pursued by the Inland Revenue Agency in the first quarter.

Corporate tax arrears averaged £7 billion a month, with the figures in January reaching £7.52 billion, February 71.4 billion and March reaching £6.79 billion.

Unpaid VAT liabilities averaged £12 billion per month, £125.5 billion in January, £125.8 billion in February and £11.97 billion in March.

Late Paye payments, including NI donations, averaged £8 billion a month, £8.71 billion in January, £8.51 billion in February and £8.16 billion in March.

"Our system is seeing a huge surge in invoice rejection as businesses scramble to renegotiate contracts, which has been shocked by tariff trauma over the past few weeks," said Jason Kurtz, CEO of BASWARE.

“In response to economic turmoil, companies may be storing reserves and postponing tax liability to preserve cash flow,” Kurtz explained.

“It is worrying that economic turmoil has also created a fertile foundation for fraud, with businesses becoming victims of payment fraud schemes, including vendor imitation, duplicate invoices and manipulation of payment details.”

Greg Watson, CEO of anti-money laundering platform Napier AI, believes that the surge in "economic uncertainty and volatility" is promoting greater opportunities for financial crime.

Watson noted that some companies were formed solely to commit financial crimes, directing illegal funds through vulnerability until it was too late.

“More scrutiny of institutions that provide financial services in businesses is needed. At the time of onboarding, many people passed rigorous due diligence checks.

“These agencies need to continuously monitor suspicious activity and use AI to detect anomalies. If we only catch it after taxes expire, we have missed the opportunity to prevent financial crime in real time, thus being the source.”

The HMRC representative concluded: “We take a supportive approach to dealing with clients with tax debt, working with them to find the best solution based on their financial situation.

Originally created and published by accountants owned by Global Database, “British business arrears reach £28 billion per month”.

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