0800 140 4644
Struggling to pay your self-assessment tax bill by the 31 January deadline? Don’t panic—you’re not alone, and there are options to help you through. At Black and White Accounting, we’re here to guide you through this, one step at a time. Let’s dive into what you can do if you can’t pay on time and how to manage HMRC’s deadlines and expectations with confidence.
1. Take Action Quickly—Don’t Delay!
Ignoring your tax bill is a sure way to turn a small problem into a big one. If you know you’re going to have trouble paying on time, contact HMRC as soon as possible. They understand that life happens, and there’s a system in place to help people facing financial challenges. The earlier you reach out, the more options you have!
2. Consider Setting Up a ‘Time to Pay’ Arrangement
HMRC offers a ‘Time to Pay’ (TTP) arrangement, allowing you to spread the cost of your tax bill in manageable monthly installments. This can be a real lifeline if you’re temporarily cash-strapped. Here’s how it works:
- You can set up a TTP arrangement online if you owe less than £30,000, your tax return is up to date, and it’s less than 60 days after the payment deadline.
- For larger amounts, or if you need longer to pay, you’ll need to speak with an HMRC adviser to discuss options. They’ll ask for details about your income, expenses, and assets, so be prepared.
3. Know the Consequences of Missing the Deadline
Missing the 31 January deadline means you’ll face penalties and interest charges from HMRC. Here’s what to expect:
- Penalties: An automatic £100 late-filing penalty if your return is late, even if you don’t owe any tax. After three months, further penalties kick in, so don’t delay!
- Interest: HMRC charges interest on late payments, currently at a rate of 6.5%, which can add up quickly.
4. Review Your Tax Return for Accuracy
Take a moment to double-check your tax return. Simple errors, like missed expenses or incorrect income figures, can inflate your tax bill. An accurate return could reduce the amount due, making it easier to manage payments. Our team at Black and White Accounting can review your return to ensure you’re only paying what you owe.
5. Use All Available Reliefs and Allowances
You’d be surprised how many people overlook tax reliefs and allowances! From marriage allowance transfers to claiming expenses if you work from home, every little bit counts. Our tax specialists can identify allowances you might have missed, potentially reducing your tax bill.
6. Explore Short-Term Financing Options
If a TTP arrangement isn’t enough, consider exploring short-term financing options. This could include a low-interest loan, credit card, or even borrowing from family or friends if the terms are manageable. Be mindful of interest rates, and ensure you have a plan to repay to avoid compounding debt.
7. Plan for Next Year—Take Control of Your Cash Flow
If this isn’t the first time you’ve found yourself scrambling to meet the tax deadline, it’s time to re-evaluate your cash flow strategy. Setting aside money monthly or quarterly can help you avoid a cash crunch in January. Our advisors at Black and White Accounting can help you set up a proactive tax plan tailored to your unique circumstances.
8. Stay Positive—There’s a Way Forward!
Finally, remember that not being able to pay by 31 January doesn’t spell disaster. With the right approach and timely action, you can navigate this without sinking deeper into stress or debt. At Black and White Accounting, we specialize in helping individuals like you manage their tax responsibilities with confidence and peace of mind.
Need Help? Let’s Chat!
If you’re worried about your upcoming self-assessment tax bill, contact Black and White Accounting today. We’ll review your options, explore tax-saving opportunities, and help you work out a solution tailored to your financial situation.
Don’t let tax stress weigh you down—take control, get support, and make a plan for a smoother financial future!
