Late payment of self-assesment

PokerFace_2

Hi,

I am just about to file my SA return and will get this done online by the deadline but it is also the first time that I am required to pay tax as I have been getting paid gross up till now. This being the case I am required (i think) to pay the full amount for the 2007/08 period and then 50% of this amount in advance for the next payment.

I should be paying around £20,000 for the 2007/08 period and then £10,000 in advance.

what happens if -

a - I pay nothing by 31st Jan
b - I only pay the £20,000

any help much appreciated!

mrkbrrws

In both cases interest will be charged on the amount unpaid from the due date to when you make payment.

If the £20,000 is still outstanding at 28 February, then a 5% surcharge may be added.

Note that if your 2008/09 tax liability is expected to be less than £20,000, you can reduce the payment on account to half of the estimated liability using form SA303.

Elaine_Wilson

Both the 2007/08 balancing payment and the payment on account for 2008/09 are due on the 31st January. So interest will be calculated from 1st February on any amount not paid.

At the end of February there will be a 5% surcharge on any of the 2007/08 tax which is still outstanding. This is in addition to the interest.

Any payments made will be allocated in the most beneficial way so if you pay £20,000 it will clear the 2007/08 liability and you will avoid the surcharge.

PokerFace_2

many thanks for the replies, really apprecaite it

so am I right in thinking taht the worst that can happen is a small(ish) interest charge if I pay the 20k in Feb and the rest a couple of months later?

hopefulfooluk

Elaine_Wilson wrote: »

Both the 2007/08 balancing payment and the payment on account for 2008/09 are due on the 31st January.

Isn't the payment on account due 1st July?

lemma1968

hopefulfooluk wrote: »

Isn't the payment on account due 1st July?

First payment on account is due at the end of January, then the second at the end of July.

HMRC do sue people...trust me i know and am paying the consequences.

If you are not able to pay your balancing payment, and you do not contact them in advance then they will throw the book at you.
At the moment the HMRC are being more sympathetic so long as you contact them before the deadline. They may let you make a arrangement to pay.

Mikeyorks

PokerFace wrote: »

so am I right in thinking taht the worst that can happen is a small(ish) interest charge if I pay the 20k in Feb and the rest a couple of months later?

Not necessarily. By 'a couple of months later' .... the local office could be round with a bailiff. HMRC have their own bailiff powers and don't need a Court order.

Working on the assumption they will simply await your pleasure ..... could prove very expensive. If you're going to pay late - you need to formalise it with them. That way - you could avoid the 5% Surcharge which is not levied if there's a payment arrangement in place. But the interest will be charged regardless.

chriiiiiiiis

HMRC love debts of that amount.

Don't leave it.

Work out what you think your liability will be for 2008-09 and reduce payments on account if necessary.