If you are having difficulty paying your tax on time the most important thing is to contact HMRC as soon as possible. Don’t ignore it and hope it will go away. By contacting HMRC as soon as possible you may avoid or mitigate any penalties that may arise. It may be wise to contact your Bolton Accountants so we can act on behalf of you as the January deadline looms large.
HMRC have discretionary powers to agree to the payment of a debt by instalments after the due date where the taxpayer is genuinely unable to pay by the due date. This is called Time to Pay. However, you have to commit to a schedule of agreed payments to bring your tax position up to date.
It is a requirement that a direct debit is set up for the instalment payments. It is a more cost-effective method of collection and removes the chance that customers will forget to make payment! It also affords greater protection in making payments under the Direct Debit Guarantee.
Whilst payment by direct debit is said to be mandatory, in exceptional circumstances (where, for example, a taxpayer can’t set up a direct debit because their bank account won’t allow it) HMRC will be prepared to agree payment by some other method.
In all cases, interest will be charged when tax is paid late. The current rate of interest is 2.75%. In addition, on balances relating to the previous year a 5% surcharge will be levied. It’s also important to remember that there are several other funding options which are available to you, such as Income Tax or Corporate Tax loans, which specialise in the repayment of HMRC debts and understand your circumstances. Alternatively, it may be worth considering a funding specialist to understand how you are able to raise the finances to clear your HMRC liabilities. Read more on Funding options here: http://www.cowgills.co.uk/services/business-funding/
If you’d like to chat about your current situation, please don’t hesitate to call us on 01204 534 031 or contact us via our enquiry page.
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4 July 2019
With a major shake-up in the treatment of VAT in respect of building work is imminent – our Senior VAT Manager, Carolyn Van Hecke, highlights the implications for those in the construction industry and why it has never been so important to apply the correct VAT treatment.