The amount of outstanding tax debt in the UK is expected to rise significantly with the approaching 31 July tax payment deadline. That is the day when self-assessed income taxpayers must pay approximately half of their annual tax bill.
The UK’s cost-of-living crisis has placed immense financial pressure on taxpayers, with many expected to struggle to make their 31 July payment, said Neela Chauhan, private client tax partner with UYH.
“Coming forward voluntarily and agreeing what is known as a ‘Time To Pay Arrangement’ with HMRC will likely yield better results than simply ignoring the debt,” she said.
“HMRC tends to be understanding with individuals suffering financial hardship, and will often agree [to] a longer payment schedule if a taxpayer is cooperative. Anyone who thinks they won’t be able to make that payment by July 31 shouldn’t be afraid of talking to HMRC about it. Its officers are generally understanding of the financial pressures facing people. There is usually scope for them to agree [to] a schedule of payments that works for both sides.
“Many people will be facing the same worry as the UK’s slowing economy and cost of living crisis have caused a cash crunch for a huge number of households.
“Burying your head in the sand means you’re going to be hit with penalties, extra tax and late payment interest. If you are already having difficulties paying now, paying even more later is not going to be any easier.”
