There are many reasons you might not be able to pay your taxes by the appointed deadline. Whether it may be a financial problem or some unforeseeable circumstance, not paying taxes can lead to more expensive problems down the road. So what do you do if you can’t meet the deadline for personal tax payment?
Call the HMRC hotline for your Personal Tax.
If you think you won’t make the deadline, have already missed it, or think that something is wrong with your personal tax bill, it is best to speak to HMRC right away. You can call the HMRC Income Tax Helpline (0300 200 3300) on Mondays to Fridays (8 AM to 8 PM) and on Saturdays (8 AM to 4 PM). Of course, a lot of people call the hotline, so expect a bit of a queue.
Once you call, ask to talk about the time to pay the agreement. If approved, they either extend your deadline or provide a new schedule where you can pay in instalments, depending on your situation. Calls made in anticipation of missing a deadline are more likely to be approved than calls after the missed deadline.
Of course, whether or not you are granted a time to pay agreement, late payments will be charged with an interest rate of 2.6% starting day one. However, by notifying HMRC, you avoid getting charged a penalty.
What if I fail to arrange a time to pay the agreement?
On top of the interest rate for late payment, a penalty of 5% of tax outstanding is charged in the first 30 days. Another 5% of the outstanding personal tax penalty will be charged if you reach the 6-month and 12-month mark, respectively.
What information do I provide when I call the HMRC helpline for my Personal Tax?
Once you call the hotline, inform them of the reason you won’t be able to settle your personal taxes by the deadline given. They will ask you personal questions about your spending and finances, like how much money you earn or how much your bills cost.
They might also ask about other family members’ income, how much you spend on stuff like clothes or on vacation, and what savings or other assets you have. If you are unsure of the details, don’t guess. Instead, ask if you can call them back with the details they need once you’ve confirmed them.
It is best to notify them of any special circumstances that might be the reason for your late payment, such as hospitalization or other unexpected situations. This way, they better understand your current situation and assist you with better solutions.
Additionally, it is a good idea to note the dates and times of your calls to HMRC, as well as the name of the person you were talking to. Also, don’t forget to ask HMRC to confirm your agreement in writing, so you know how much you will be paying in total.
What if I think there’s something wrong with my personal tax bill?
Whenever you think there is a discrepancy in your tax bill, you may also call the HMRC Income Tax Helpline to clarify their calculations. There are several reasons why there might be something wrong with your bill, and the mistake could either be on your part or on HMRC’s end.
If the mistake were on your end, such as an error from your personal tax return, you would need to correct the mistake through proper forms as advised by HMRC. Moreover, to prevent discrepancies in your tax bill, make sure to inform HMRC of changes in your employment status right away. Always file your tax returns to avoid “determination” (having your income tax estimated based on the last return you filed).
If it looks like HMRC made a mistake, you may be able to appeal an income tax decision. However, it is best to consult with an accountant first or speak to an adviser at the nearest Citizens Advice before proceeding with the appeal.
In case a payment you made previously hasn’t been taken into account, notify HMRC right away.
Other enforcement actions HMRC can make.
It is rare to be prosecuted and sent to prison for personal tax evasion, but HMRC can take court action, seize your assets, sell them at auction, or have your business closed down. In some cases, they can take money directly from your bank if your debt is more than £1,000.
If you are struggling with paying your taxes, you can reach out to several bodies such as Citizens Advice and TaxAid to assist you.