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Tony Tax
Tony Tax, Tax Consultant
Category: UK Tax
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Experience:  Inc Tax, CGT, Corp Tax, IHT, VAT.
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Clarification re penalties/interest payments for late/missed

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Clarification re penalties/interest payments for late/missed tax payments

Dear expert, I am late paying my tax bill - due 31st July 2013. I have received a 'reminder' letter stating that interest is accruing at the rate of £0.46 per day. I hope to pay this bill in the next few weeks - but I have 2 queries:

1. I recall in the past tax years a 5% surcharge if the bill was not paid within 1 month. Does this 5% surcharge only apply to the January tax payment?
2. Assuming there is no 5% surcharge, the interest rate is quite low. How late could I pay the outstanding July bill of c. £5700 before HMRC takes further action?

Thanks. Kuhan.


1 The 5% surcharge applies to tax for a particular tax year which is still unpaid at midnight on 28 February following the end of the tax year for which it is due. So, if you don't pay the tax due on 31 July 2013 and any other tax due for 2013/14 by 28 February 2014, you will be hit with a 5% surcharge.

2 £5,700 is a not insignificant sum. HMRC could start calling you or visting you at any time. If you cannot pay it all at once, pay some of it on a regular basis, ie every two weeks or monthly and you may be left alone. However, there is no guarantee and HMRC use private debt collection firms these days who only get paid by results.


I hope this helps but let me know if you have any further questions.

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