How to pay tax
Thanks for reading this far – some of my colleagues have suggested that the title of this blog is guaranteed to ensure that nobody reads it, you have just proved them wrong!
If you have to pay Self Assessment tax for the year to 5th April 2016 you must pay the outstanding amount by 31 January this year. HMRC accept payment by all sorts of methods but they prefer you to pay online. You can pay by debit card with no charge and by credit card if you are happy to pay a fee. Unhelpfully HMRC say:
“HMRC limits the number of times you can use a credit or debit card within a certain time to pay your tax.
“There isn’t a set limit - it depends on HMRC’s view of what’s reasonable based on payment card industry standards and guidance.”
Very helpful guidance I am sure you will agree. So, if you are intending to pay by card, play safe and plan to pay by a single payment.
You can also pay by telephone or internet banking, direct debit (but see below), and even by cash (up to £10,000) over a Post Office counter (if you can find one near you). A word of warning, if you decide to pay by direct debit you need to be aware that you will only be paying the amounts you specify, it is not like (for example) paying VAT where the direct debit covers all future amounts until you cancel it.
If you cannot pay on time don’t stick your head in the sand and hope HMRC will go away, they won’t! If you are over a month late in paying you will pay an extra 5% and then 5% every six months. Rather than delaying payment and paying a penalty get in touch with HMRC before 31 January and try to negotiate time to pay – if you stick to whatever deal is agreed you won’t pay penalties.
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