Andy warns that unpaid tax debt carries additional risks beyond interest, adding: "Beyond financial penalties, the longer a tax bill remains unpaid, the greater the risk of HMRC scrutiny.
Andy Wood, a tax expert from Tax Natives, said that in the "grand scheme of things", the cut to interest rates charged on late payments was "hardly significant".
From February 17, the interest rate on late payments for taxpayers with outstanding tax debts with HMRC will drop from 7.25% to 7%.
Currently, the tax office pays 3.5% interest on tax refunds, which is calculated as the base rate minus 1%.
There are also additional penalties for paying late of 5% of the tax unpaid at 30 days, six months and 12 months.
