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Help! I can’t afford my tax bill!

Tax

If you were self-employed in the tax year ending 5th April 2019 you will have needed to register for self-assessment by 5th October 2019, and the deadline for submitting paper returns passed on 31st of October 2019. The deadline for submitting online is 31st of January 2020, which importantly is also the deadline for paying the tax you owe, and making the first payment on account for this year.

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If you won’t be able to pay by the deadline

If you weren’t expecting it, or if the bill is more than you thought, you may struggle to pay by the deadline. If you find yourself in this situation it’s important to contact HMRC as soon as possible, as the earlier you let them know the more likely it is that they’ll be able to help. Making an arrangement to pay early on will also minimise the amount you have to pay in penalties.

Consequences for non-payment of tax

If you don’t pay on time, you’ll probably have to pay interest on the outstanding amount and you may also have to pay a penalty charge. Ultimately, if the situation is not resolved HMRC may take enforcement action, including using debt collection agencies, taking money directly from your bank account or forcing the sale of your property to recover what you owe. For this reason, it’s extremely important to contact them as soon as you know you won’t be able to pay on time.

Interest and charges

There are separate penalties for late submission of your self-assessment tax return, and for late payment of tax. HMRC will charge interest on any tax you owe. At the time of writing the interest rate is 3.25%.

Saving for your tax bill

To make sure you don’t incur interest and additional charges in future, it’s important to make sure you’re prepared for your tax bill, and that you have the resources to pay on time. Talk to your accountant about the best way to save for your future bills.

It’s also important to ensure you submit your self-assessment tax return in plenty of time, so any issues can be addressed and resolved without the risk of missing a deadline.

If you have questions or if we can help in any way, please call our expert team on 01296 468 483 or email info@orangegenie.com.

 

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