If I end up having to pay my tax late..

[Bellatrix257]

I’ve already filed my 2017-2018 tax return.

I owe around £5000 due 31st January, £1660 of which is on account.

We are buying a house (ftb) and have worked really hard to save 10% deposit and have found a house we like, our offer is likely to be accepted.

If all goes well our current savings and the next 3 months of savings will cover the deposit, moving costs and my tax bill.

I’ve been saving about 65% of my income each month.

I normally buy lots of Christmas presents for family but not going to do that this year! (Don’t have children yet so at least that’s something)

But if there are any hidden costs eg the boiler breaks down , my income falls with the move of house, we will struggle.

Forseeing this I ran up HRMC and asked if I could potentially set up a payment plan to pay half of the tax owed at the end of February. The woman said no they’d expect me to be able to pay at end of January. I said if in worse case scenario, I couldn’t, what would the late payment penalty be if I had to pay a few weeks later? She said it’s 3% per annum on tax owed, broke down into a daily charge. That seems verrrrrry low I thought, and I worked that out as 41p interest per day - that can’t be right surely?!? She said yes but I don’t trust her too much.

Hopefully we’ll not have to spend any money (quite happy to scrimp and we have a couple bits of furniture already and the house doesn’t need anything doing immediately we don’t think) but if I end up not having £5000 in my account by 31st January, would it really only be 41p per day for me to pay extra? And would it go on my credit report?

Thanks for any experience!!!

You will get a fine too. £100 I think. I have (twice) and just sucked it up.

An alternative is get a 0% credit card, transfer the money to your bank and use that.

You can apply to reduce your payment on account. For next year set up a monthly payment plan if possible. I do this and it was great to have nothing to pay in July.

Thank you @PrimalLass that’s not toooo bad I guess!!! Do you know if it affects your credit score? And good idea about credit card I didn’t know I could do that.. or I guess we could just put all food/bills and stuff on my partners credit card (it’s just got £400 outstanding and another year of 0% interest on) once we’ve bought the house and then should deff have enough for my tax!

Sorry didn’t see your second message! I was asking about that on the phone and she just said ‘no’ - she was useless! Is it worth ringing again and asking about that payment on account being delayed or would that be something I’d do for next year? Thanks!!

I reduced my payment on account as my income had fallen. I slightly miscalculated and underpaid them slightly, once final figures had been calculated. I just paid interest on the underpayment, no fine.

I asked to reduce my payment on account for this year when I did my tax return. The system 'accepted' right away and recalculated it.

You can do it yourself online. It's very easy.

Oh that’s great thanks everyone for replies! That doesn’t go on credit report does it? Might wait till we receive mortgage offer!

You should only reduce your payments on account IF your income has reduced, otherwise those payments on account will become payable immediately when you submit your next tax return along with interest and a possible penalty

If you can’t pay it when it’s due you can ring HMRC Business Support team and agree a payment plan with them but you also have to allow for putting away the July payment on account.

In addition to the interest, there's also a 5% surcharge on the amount paid a month late, plus another 5% surcharge on the amount still outstanding 6 months later. The £100 mentioned above is for being late with submitting the return, not late payment.

If HMRC agree a payment plan with you, then there won't be any surcharges, it is only if you don't pay and don't agree anything. I have had a client issued with charges in error and they always cancel them as long as they have an agreement and have been paid on time each month as agreed.

Thanks everyone good to know actual in date information!

How would you go about agreeing a payment plan sprinkled? That’s what I was hoping for when I rang up but I was told no

HMRC won't agree to a payment plan until the tax is actually overdue. Give them a call in February to sort it.

If you can pay some now, I would use the link at the bottom of my post to try and set up a budget plan and pay something each month, if you can't, then you would need to ring in January, it states "before the payment deadline" and arrange a plan with HMRC. You would need to have a good reason, so unexpected move costs, or something like that should be good enough. If you can pay some now, you could ring then about the balance if still owe some.

From the website: www.gov.uk/difficulties-paying-hmrc

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Contact HM Revenue and Customs (HMRC) as soon as possible.

You might be able to set up a payment plan to pay in instalments. You’ll need a Government Gateway account.

You have to pay interest if you pay late. You may avoid penalties by contacting HMRC as soon as possible.

If you cannot pay before the deadline, call the Business Payment Support Service. Anyone can use this service, not just businesses.

Business Payment Support Service
Telephone: 0300 200 3835
Monday to Friday, 8am to 8pm
Saturday and Sunday, 8am to 4pm
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For future payments you can set up a budget plan:

www.gov.uk/pay-self-assessment-tax-bill/budget-payment-plan