With less than 2 weeks to go until the deadline we thought we’d address the surprising amount of people who haven’t yet filed and or paid their tax return. At the beginning of January HMRC reported that 5.7 million people were yet to file their tax returns in time for the deadline of 31st January 2023.

HMRC estimates that approximately 12 million people are expected to file their tax return by the deadline. On 1st January 2023 between midnight and 1am, 129 people submitted their tax returns. I just hope they were sober when doing so!!

The only way to file your tax return now if you haven’t done so is via HMRC’s Government Gateway. The deadline for postal submissions was back in October last year.

What if I don’t file or pay my tax return on time?

• You will receive an initial £100 fixed penalty, even if you don’t actually owe anything
• After 30 days HMRC will hit you with a 5% charge on the outstanding amount
• After 3 months have past you will receive additional daily penalties of £10 per day up to £900 
• If you don’t submit by 6 months after the deadline you will incur a further fixed penalty of 5% of the amount outstanding or £300 whichever is the greater amount.
• After 12 months HMRC will apply a further 5% charge to the amount owed. 

This is why we can’t stress the importance of paying your income tax by the due date. You don’t want to have to pay the taxman more than you need to!

What if I can’t afford to pay my tax bill?

If you can’t afford to pay your tax bill you have options but must let HMRC know as soon as possible. The deadline has now passed to be able to apply for a Time to Pay arrangement online so you must call them. The deadline for online application is 60 days before 31st January. You may be able to enter into a Time to Pay arrangement if the following applies;

• You have already filed your latest tax return
• You owe less than £30,000
• You plan to pay off your debt within 12 months
• You don’t have any other debt outstanding with HMRC

What will HMRC ask me when I call?

When you call HMRC you will need the following information to hand;

• The reference number for the tax you cannot pay - your unique tax reference number
• Your bank details
• Details of any  payments you have missed if applicable

They will ask you;

• Why you can’t pay the bill
• How much you can afford to pay
• If there’s any other tax you need to pay
• How much you earn
• What your outgoings are each month
• What savings and investments you have

Be warned if you have savings and assets HMRC will expect you to use these in order to reduce your debt with them as much as possible.

If you need some help in making sure that you submit your tax return on time and can afford to pay your tax bill, please get in touch. We would love to help support you in improving the health of your cash flow.