If you are a seasoned sole trader, then you will be well aware of payment on accounts, the forward paying tax for the existing tax year. If you are newly self-employed, then check out our guide on how best to prepare for payment on accounts. Basically, now that you have filed your tax return you are also due to pay your tax bill for the 18/19 tax year too.
Top tip: You can complete your tax return as early April after the tax year in question so you have time to pay your tax bill, with final payment not due until the deadline of 31 January. Furthermore, if you do complete your tax return early and are due a tax refund, HMRC will process these automatically rather than waiting for the 31 January deadline.
So for those sole traders out there due to pay a balancing payment for 18/19 tax year and your first instalment for the current tax year, 19/20 and are struggling to pay your bill, the good news is that you do have options.
Call HMRC’s Business Payment Support Service team
If you cannot pay your tax bill, you should call HMRC’s Business Payment Support Service (BPSS).
HMRC will ask you some questions around your income and expenditure, your assets and how you plan to get your financial affairs in order to avoid issues paying your tax bill in thee future.
If HMRC are happy that you are genuinely looking to pay your tax bill as soon as possible, you may be given an extension to settle your tax bill or be able arrange a payment plan.
HMRC will, however, expect you to pay your tax bill in full and will charge you interest on any outstanding tax due by you.
If you think you need to speak to BPSS, you should contact them as soon as possible and ideally should do so on or before the 31 January deadline. If HMRC BPSS team does grant you an extension or set up a payment plan for you, it is imperative that you keep up payments and they will arrange a monthly direct debit with you.
If for any reason you do cancel your direct debit, HMRC will cancel your payment plan arrangement and start legal action to recoup the funds.
Do not fear, Mirandus team are here!
If you would like to know more about your options or you would rather not speak to HMRC directly, why not give us a call to see how we can help. We work with HMRC on an ongoing basis and are confident that we can negotiate a payment arrangement on your behalf.
Don’t delay, get in touch today.