Taxpayers have been warned about a key HMRC figure to bear in mind that could quickly add to your costs. The tax body recently issued a reminder to customers to make sure their details are in order.

A HMRC spokesperson said: "Everyone is responsible for ensuring their own tax code is correct, and they can manage and update their tax code quickly and easily on our app or via their online tax account." You can view many other of your details through the app or your online personal tax account, such as your income tax estimate for the current year.

Taxpayers may also want to check they are up to date with the taxman, as the deadline to submit their self-assessment tax return for the previous tax year is coming up on January 31. If you don't pay your dues on time, there is a late repayment interest rate that applies to your owed amount.

This is based on the Bank of England base rate plus four percentage points, meaning it is currently 7.75 percent. HMRC guidance states that this rate applies to "the main taxes and duties that HMRC currently charges and pays interest on".

However, customers may be irked to learn that if the tax body owes you some cash, the rate it applies to the owed amount is way below this, at just 2.75 percent. This rate is also set based on the base rate, but at one percentage point below the base rate. There is a lower limit for this rate of 0.5 percent.

Explaining this discrepancy, HMRC guidance states: "The difference between rates is in line with the policy of other tax authorities worldwide. It compares favourably with commercial practice for interest charged on loans or overdrafts and interest paid on deposits."

Karen Barrett, founder of financial advice platform Unbiased, said: "The five percentage point gap between what HMRC charges for late payments and what it pays for refunds highlights a stark reality for UK taxpayers: the financial stakes for getting your tax wrong are incredibly high.

"A 7.75 percent interest rate can feel punitive, particularly when many late payments arise from financial pressure or changing personal circumstances, not wilful avoidance. And while a debate on the fairness of the system is valid, it doesn't solve these practical, real-world problems."

It's worth noting that this late payment rate applies not just to the amount you owe but also to any penalties that are added on top of the amount. For example, if you file your self assessment tax return late, you get an initial penalty of £100, with further charges if you still haven't paid up after three months.

There are further penalties added to your bill once you reach the six-month and 12-month mark. In light of these hefty potential bills, Ms Barrett urged people to keep on top of their finances.

She said: "What really makes a difference is taking a proactive approach. With the support of a financial expert, it becomes far easier to plan ahead, manage cash flow, spot potential tax liabilities early and avoid problems escalating.

"If you are concerned about your tax position, or your finances are more complex, seeking advice from a qualified accountant or financial adviser can be invaluable. Having an expert on hand not only helps reduce risk, but also provides reassurance and clarity at what can otherwise be a very stressful time."

However, others think the 7.75 percent repayment rate should be significantly increased. Nishi Patel, managing director of N-Accounting, said: "The rate for late payment needs to be much higher, as currently it is more generous than getting a loan from a bank and many taxpayers will view it as a reliable source of finance.

"There are penalties for late payment of personal tax which effectively achieve this, however business taxes like Corporation Tax and PAYE don't have this."