How to pay your tax bill
There are two dates in the year when personal tax payments fall due, being the 31st January and the 31st July. Whilst we remind all of our clients of the amounts they’re due to pay, it’s worthwhile outlining how to make those payments!
There are some important considerations around how to pay your tax bill, with time being the primary one!
We’ve collated the various methods to make your payment, which you can download below. Bear in mind that each method will take time to set up, if you haven’t had to pay before.
The fastest method is online, up to five working days for making payment by Direct Debit.
In the same way that it’s advisable to get your Return completed early, so that you know and can prepare for the amount you need to pay, it’s a good idea to get your payment set up sooner rather than later.
Late payments will always attract interest and penalty charges, and it can take between three and five working days for your payment to reach HMRC, so don’t leave it too late!
What if I can’t pay on time?
HMRC will charge penalties and interest if your tax payment is not received in time, UNLESS you have already agreed a payment arrangement with them.
You will still pay interest on any amount that’s paid under a ‘time pay’ arrangement, but you can avoid penalties IF you arrange the payment plan before the tax falls due.
Self Assessment Payment Helpline Telephone: 0300 200 3822
Opening hours: Monday to Friday 8am to 6pm
When you call you’ll need to provide:
- Good reasons why you can’t pay.
- A realistic proposal to clear the liability in a reasonable time scale.
- Financials to support your proposal.
Don’t wait until after the due date as they’ll be much less accommodating!
What if my income has reduced this year?
Your Payments on Account are based on the income you declared in your Tax Return for the previous year. If your income since then is significantly lower, it’s possible to reduce your Payments on Account to take account of this reduction, but you need to be careful!
If you reduce the Payment on Account to a level that is below the amount that your Tax Return subsequently shows, you’ll have to pay interest on the difference. In this case, it may be less of a risk to pay the full amount requested, and recover any resulting overpayment from HMRC once your next Tax Return has been submitted and processed.
If you’re unsure, and are a client, please get in touch and we can talk it through with you and decide on the best course of action for your personal circumstances.
Can I pay my Personal Tax from my company?
This is a little more complex, so we’ve got a separate post that you might like to look at!
As ever, if you have any questions around how to pay your tax bill, please shout!
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