Publication featured in The Sun
New data shows the amount of debt owed by taxpayers to HMRC has hit £34.1bn and looks set to rise again as a key tax deadline approaches.
The amount of outstanding tax debt in the UK is expected to rise significantly with the approaching July 31st tax payment deadline. That is the day when self-assessed income taxpayers must pay approximately half of their annual tax bill*.
The UK’s cost of living crisis has placed immense financial pressure on taxpayers, with many expected to struggle to make their July 31st payment. Any taxpayers that are struggling to pay their tax bills should contact HMRC and reschedule payments to avoid penalties.
Neela Chauhan, private client tax partner, says that coming forward voluntarily and agreeing what is known as a ‘Time To Pay Arrangement’ with HMRC will likely yield better results than simply ignoring the debt.
Neela adds that HMRC tends to be understanding with individuals suffering financial hardship, and will often agree a longer payment schedule if a taxpayer is cooperative, saying:
“Anyone who thinks they won’t be able to make that payment by July 31 shouldn’t be afraid of talking to HMRC about it. Its officers are generally understanding of the financial pressures facing people. There is usually scope for them to agree a schedule of payments that works for both sides.”
“Many people will be facing the same worry as the UK’s slowing economy and cost of living crisis have caused a cash crunch for a huge number of households.”
“Burying your head in the sand means you’re going to be hit with penalties, extra tax and late payment interest. If you are already having difficulties paying now, paying even more later is not going to be any easier.”
* In the form of an advance payment worth half of the estimated value of next year’s tax bill