I can’t pay my tax bill – what should I do?

With fluctuating incomes and the costs of living hitting businesses and individuals alike, people who have never previously had any issue with paying tax bills on time may have found themselves passing the 31 July payment on account deadline without being able to pay what they owe.

If this is the position you find yourself in, what should you do?

Don’t bury your head in the sand!

The very worst thing you can do when you owe money to HM Revenue & Customs (HMRC) is to do nothing.

Failing to act will see interest and penalties increase rapidly, meaning you’ll have to find even more money to cover your debt, plus any interest or fines charged.

Do speak to HMRC

For Self-Assessment debts of up to £30,000, HMRC lets you set up an instalment plan online to pay off the debt in more manageable monthly payments.

You can do this here.

To be eligible, you must be within 60 days of the payment deadline and able to make the repayments within 12 months.

If that is not the case, then you should call HMRC on 0300 200 3822.

If you cannot access HMRC’s Time to Pay arrangements, you might be able to spread the cost of your bill with a tax-specific loan.

Posted in Business news.