How do you pay a big tax demand?

sotaxing

If you were about to receive a tax bill for unpaid tax from the previous tax year, how would you have to pay it?

Could they take it all from salary this tax year, change my tax code or would I have to pay by cheque now?

thanks

ManAtHome

Depends how big the bill is - limit for collection through next years PAYE is £2,000 - details here http://www.hmrc.gov.uk/pdfs/sabk8.htm#m

Mikeyorks

Also depends on how it's arisen? (as in 'inadvertent' or 'deliberate')

ctm_2

Depends how the underpayment has arisen, and wether it is the result of a Self Assessment tax calculation, or a PAYE tax calculation.

If SA, then if it's under £2k then if your return was received before the end of september the underpayment can be collected through your code during 2007-08. If after 30 sept then the payment was due by 31 January.

If a tax calculation outside of SA, then it will be collected through your tax code next year.

Or you could send in a cheque to pay it off rather than it being collected through your code.

Give us more info on how and when this underpayment has arisen and we'll be able to tell you more.