Paying income tax in installments

Heidi100

I am unable to pay full income tax bill on the 31st of Jan due to not working full time due to illness. If I pay in installments will I have to pay interest if I get a letter from my GP?

Wayne_O_Mac

Yes. Interest is chargeable regardless of the reason a payment is late.

Heidi100

Do you happen to know how much interest is charged?

Wayne_O_Mac

2.75% per year.

DebbieR

https://www.gov.uk/difficulties-paying-hmrc


Late payment interest rate - 2.75% from 23 August 2016

Heidi100

So it's 2.75% of the the total tax due and divide by 365 to find out the interest per day. Multiplied by the number of days it is late?

[Deleted User]

Heidi100 wrote: »

So it's 2.75% of the the total tax due and divide by 365 to find out the interest per day. Multiplied by the number of days it is late?

It is treated exactly like a credit card debt with interest added daily to the outstanding balance.

Wayne_O_Mac

Heidi100 wrote: »

So it's 2.75% of the the total tax due and divide by 365 to find out the interest per day. Multiplied by the number of days it is late?

Yes. So for example if you owe £1000, the interest is about 7-8p per day.

You will have to contact HMRC and get agreement to the payment plan, or you'll be charged 5% of the outstanding tax if it's not paid within 30 days of the due date.