What exactly are the consequences if you fail to pay self assessment Tax Payments on time?
If you are facing financial issues, and don’t see a way to afford the tax, what is the best strategy to avoid confrontation with HMRC and minimise any penalties and interest charges?
Late Payments & Penalties
At this moment in time, the interest charge on Late Payments on tax is 2.75%.
The trigger dates for penalties is 12 months, 6 months and 30 days after the tax becomes due for payment. On each of these trigger dates you will be charged a 5% penalty based on the amount of tax outstanding.
If you are concerned that you might not be able to meet your liabilities when they’re due, there’s two approaches:
- Make a realistic estimate of when you can settle amounts due. This may be in instalments or just payment in full at a time after the due date.
- Call HMRC’s Business Payment Support Service on 0300 200 3835, and agree an extended payment scheme with them. Generally speaking, they will agree as long as your suggested scheme clears any outstanding liability before your next liabilities become due for payment. They will also exhort you to gather funds such that you can settle future tax on the due dates.
If you need any Financial Help or financial advice on how you can squeeze every penny, then get in contact with us today on 01524 67371, or head to our contact page!