As we approach the end of July, contractors who have to make payments on account of their 2018/19 personal tax liabilities should hopefully be in a financial position to make those payments by the due date of 31 July.
However, HMRC figures recently made available indicate an increasing uplift in interest and penalties being charged for late tax return filing and payments over the past couple of years.
Contractors who have been in the Self- Assessment tax system for some time will be aware that HMRC charge a penalty of £100 if a personal tax return is filed late i.e. after 31 January each year following the end of the tax year. There are daily and recurring penalties if the return remains outstanding.
Observers believe that the increasing number of new self-employed individuals with a lack of awareness of the tax filing and payment rules are also failing to make provision for their liabilities. This is leading to an increase in late payment interest and penalties which can be quite severe – a fine of 5% of the tax unpaid at 30 days beyond the due date (again 31 January), the same again after a further 6 months and 12 months.
A fine of 5% of the tax unpaid at 30 days beyond the due date (again 31 January), the same again after a further 6 months and 12 months.
HMRC’s advice is for taxpayers to contact them before the tax is due if they don’t think they can pay the tax due on time. A payment arrangement can often be negotiated.
Contractors using PayStream’s Tax Return Service receive calculations of what tax they need to pay and when they need to pay it. We also send reminders about payment before each due date. For those who have fallen foul of penalties for late filing we offer a Penalty Appeal Review Service.
If you still need to register for your self-assessment tax return 2020/21 then click here.
