DON’T MAKE JANUARY TOO TAXING
Most of us know that the Tax Return and tax payment deadline is 31 January 2016.
Failure to file your Tax Return is an automatic penalty of £100 – this is even if you do not have any tax to pay. That is not the end of it, however. Once you reach 1 May, you will be liable to daily penalties of £10, up to a total of £900, and there are additional penalties beyond that.
Interest is payable at 3% on any late payment of tax. Even more costly is a flat 5% surcharge on the balance not paid within 30 days, and there is a further 5% penalty on the balance outstanding at 31 July.
And, long before this point, you will have had some nasty letters and phone calls from the taxman, threatening all sorts of action against you.
The key is to take control of the situation long before it gets to this stage.
Filing the Tax Return is the first matter. You will need to file it online as the deadline to submit it by post has already passed. Whilst this is possible, you need to be registered with HMRC and have the necessary ID and passwords, and you will also need to have all of your information to hand. This all takes time.
Paying the tax is next, and not always easy to deal with. Money can be tight at that time of year. If this is the case, do not just ignore it.
Firstly, you can call the HMRC Business Payment Support helpline to discuss what you can currently pay. In the right circumstances they will allow a time to pay arrangement, and spread the tax bill over a few months. Not only will this stop the 5% surcharge that would normally apply, it will also stop any nasty demands.
Secondly, part of the tax payable on 31 January will be a payment on account of next year’s tax bill. Assuming that you have good grounds for saying that next year’s tax bill will be lower than this year, you can submit a claim to pay less on account.
Of course, a qualified accountant is the best way to ensure you are on the right side of all of these points. Please give me a call tel. 01952 811745 if you want to discuss your tax matters further.
This article first appeared in the January 2016 edition of the Nova Magazine in Newport (tel. 01952 810560)