If you can't pay your self-assessment bill to HMRC by January the 31st you should follow our advice and get...
There are thousands of people within the UK who are currently being chased by H M Revenue & Customs (“HMRC”) for unpaid tax. Some just don’t want to pay it and try to avoid doing so at all costs, but then there are others who simply can’t afford to pay. Now for the cynics out there, the answer is simple – you know you have to pay it, so make sure you account for it. Everybody pays tax, so why is it such a surprise when it comes to handing over your money?
We all expect it, but I’m quite sure we all look at the figures produced by our accountant and wince a little at what is due. It’s a bit like a mechanic when he’s giving you a price to fix the brakes on your car as he says – “it isn’t gonna be cheap love!”
We all have good intentions and from the last time you paid your tax, you probably decided that you were going to be super organised this time round and make sure you had money put aside to pay over to HMRC. But then that falls by the wayside and one month becomes three, turning into six and then twelve and then your tax bill is here again.
Now it’s all well and good if you are organised and have put a little bit aside – you can pay your tax bill on time and avoid penalties and interest. But what about those that haven’t? What about the businesses, who despite turning a profit, don’t have the funds to pay HMRC the sums due?
The first rule in this situation – don’t panic! The second, as difficult as it is, pick up the phone and speak to HMRC. As daunting as that sounds, they are not superior beings who are merely there to collect taxes come what may. They are in fact genuine people who, wherever possible, will help you sort out your tax affairs. You can read more about how HMRC can help you by following this link.
So, you’ve now spoken to HMRC, and due to your current financial circumstances, are not in a position to pay HMRC the tax due, whether that be in full or by way of monthly instalments. What do you do next? The next important rule – don’t ignore the situation. Just because you’ve told HMRC you can’t afford to pay them doesn’t mean that they will stop taking action against you. As Company Directors or business owners it is your responsibility to ensure that the tax issues are properly dealt with. If you ignore HMRC and their letters, they will take action against you or your Company, which can include a winding up petition being issued against your business or a petition being issued for your bankruptcy.
If you can’t pay and haven’t been able to agree anything with HMRC, you need to take action by seeking advice from a Licenced Insolvency Practitioner (“IP”). They will listen to your problems and then provide clear and practical advice on what your options are. The earlier you seek advice, the more chance there is of recovery. Just because you take advice from an IP doesn’t necessarily mean that you Company is insolvent and is going to be wound up, but you need to act sooner rather than later for the best chance of survival.
Here at Lines Henry, we have dealt with many businesses and individuals who are struggling to pay their taxes. To see how we can help you, give us a call on 0800 012 6649 (0161 929 1905 from a mobile). To request a call back, email with your contact details and one our IP’s will be happy to help.