What to do if Carillion owes your business money22nd January 2018
Payday finally arrives but finances still bleak for many1st February 2018
The self-assessment deadline is less than a week away on January 31. You must have submitted your tax return and settled your income tax bill before this date, or you will be liable for additional penalties.
More time to pay
If you know that you won’t be able to pay your bill on time, you should contact HMRC and talk about a time to pay arrangement.
HMRC is legally obliged to consider this type of agreement, but generally they are more willing to accept an offer made before the January 31 deadline, compared to an offer made afterwards, so don’t delay.
The agreement will give you more time to pay, or allow you to pay in instalments. You will be charged interest on all the tax debt but you may be able to avoid additional fines if you contact HMRC in good time.
When you speak to HMRC about a payment agreement they will ask you about your income and expenditure, your assets, including savings and investments, and what steps you are taking to get your tax payments back in order.
Before you call HMRC, you should write down:
- Your reference number.
- The amount your struggling to pay and how much you can pay straight away (if you can pay a lump sum off right away that will work in your favour).
- How long it will take you to pay off the outstanding amount.
- Everything you’ve done to try and get the money to pay.
- Details of any extenuating circumstances.
- Bank account details.
HMRC will use information you give them in the phone call to decide whether you should be able to pay immediately.
If they are inclined to give you more time to pay, they may ask more in-depth questions such as ‘how much do you spend on clothes’ or ‘what do family members earn’.
If you think you have a good reason why it was difficult to pay, make sure you tell HMRC. For example, if a family member has been ill or if one of your customers became insolvent, HMRC may take these circumstances into account because you were not able to plan for them.
What happens if you don’t pay?
As well as late payment fines, HMRC has additional powers to recoup money from you. This is why HMRC debts should always be considered a priority.
If you don’t pay your income tax and don’t make an agreement to pay it then HMRC can take steps to:
- Take your possessions, including vehicles, to sell at auction
- Take money from your bank account
- Take court action
- Make you close down your business
- Make you bankrupt
They will not necessarily work in this order. They tend to take whichever action they believe will be the most successful.
If you are struggling to pay your income tax bill alongside other serious business or personal debts, you should seek professional help as soon as possible. Speak to a member of our debt advice team today. Call: 0800 611 8888. www.umbrella.uk