By Hayley Robins, Senior Accountant at Hive Business
Not everyone gets to the end of January with an amount in their tax account to cover their bill.
January tax bills can catch you out as, more often than not, the magic figure calculated as your ‘Accounting Profit’ doesn’t match the cash you have in your pocket and as such you’ve spent the tax.
So, what can you do if the money in your tax savings account doesn’t cover the amount you have to hand over to HMRC by 31st January?
HMRC’s previous “payment plan” offering is somewhat more difficult to arrange these days given their own cashflow issues, although it is definitely worth trying first. It is after all, with no application forms and no mark on your credit record. The interest rates aren’t too bad either.
We have some small tips if you are thinking about trying them for some leniency:
- Contact them before the payment deadline of 31 January
- Try and pay as much as possible by 31 January as part of any arrangement. HMRC will be more inclined to arrange a payment plan for the remaining amount if you can contribute something.
- Be prepared for them to ask you what you have spent your profit on, and what you have tried to access funds for your tax payment.
Alternatively, we are also continually keeping abreast of the finance marketplace to determine the best available provider for funding your tax payment. Be aware that you will obviously be paying them interest, although we have found the best possible, and it will also be considerably better than the 5% (of unpaid tax) penalty you will incur from HMRC if you don’t manage to make your payment in time.
Please contact us for information and further guidance on 01872 300232 or email us at hello@hivebusiness.co.uk.
