For sole traders, freelancers and self employed people, tax returns are a twice yearly fact of life that simply can’t be ignored. If you think you may have trouble paying your tax bill at the end of this month, you’re certainly not alone. Through no fault of their own, many small businesses are struggling and a tax bill can be the final straw. On top of debt repayments and other overheads it can all become too much.
The most important thing is to do something about it, now. Tax bills and the taxman don’t go away if you do nothing, they just get bigger and more serious, but if you can get your financial affairs in order and take a clear view of your position, you should be able to find a strategy to get you out of a very stressful situation.
Start by checking your self-assessment statement and make sure it is correct. If your bill is right but you can’t pay it, it’s important to get in touch with HMRC sooner rather than later. Once your tax payment is late, interest is chargeable immediately and additional penalties of 5% are payable if the tax isn’t paid by 28th February.
The tax office will issue summonses if no payment is made, so you should telephone your tax office to discuss it with them as soon as you can.
Tax officials have to pursue unpaid tax but they do understand that people get into difficulties and they want to help you find a solution. If you can’t pay the whole amount of the tax bill the best course of action is to work out exactly what you can pay now and let HMRC know when you will be able to come up with the rest of the money.
You can request a formal arrangement to pay tax by instalments but this involves a lot of form-filling, so an offer to pay a lump sum and an informal repayment schedule, suggested by you, will often be accepted. If you ignore the problem or can’t make a payment arrangement, HMRC will take legal action to collect what you owe.
The Inland Revenue’s own website has information on payment problems but facing tax problems alone can be daunting. Contact us for a free, impartial and confidential discussion that will help you to work out the best, practical solution to your tax and other debt problems.
Paying back tax can be a long, hard slog but talking to us rather than simply worrying about your tax bill will ensure you have fewer sleepless nights and we can help set you on a positive financial course for 2013.
Sometimes known as a full and final offer, a debt settlement offer is where you agree to make a lump sum payment to your creditors in order to settle the remaining debt you have with them.
If you have fallen behind in your debt repayments to creditors, you may find yourself visited by a Sheriff Officer or debt collector looking to recover the money you owe.
Our Scottish based team can help advise you on your debt problems.