New figures show self-assessment taxpayers owe HMRC more than £1.6 billion in late payments on 2017/18 tax bills.
The deadline for 2017/18 submissions came and went on 31 January 2019, with more than 11.5 million taxpayers beating the midnight cut-off – a new high.
The £1.6bn currently estimated to be owed for 2017/18 is expected to surpass the final total of £1.83bn paid late in 2016/17.
That would continue a trend – the amount of tax owed by those who missed the payment deadline has increased every year for the last three years. This figure rose from £1.65bn in 2014/15 to £1.76bn in 2015/16, before climbing to last year’s figure.
According to the Office for National Statistics, the UK’s self-employed population increased from 3.3m in 2001 to 4.93m in March 2019.
But taxpayers going through self-assessment for the first time often do not fully understand how the self-assessment tax system works. For example, tax on first-year profits is paid at the same time as the first payment on account for estimated tax owed on predicted second-year profits.
This lack of understanding can lead to unexpectedly large tax bills in the early years after registering as self-employed.
A spokesperson for HMRC said:
“If customers are unable to pay on time, they may avoid penalties by contacting us as soon as possible and we can discuss whether it might be possible to set up a payment plan.”
In January 2018, the Revenue banned taxpayers from using their personal credit cards to pay their annual tax bills. Personal debit cards can still be used to pay a tax bill, as can company or corporate credit cards.
We can handle your self-assessment tax return.
Laura Train
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