Tax Payments – How late can you be?
With the madness of the January tax return deadline, it may have slipped some of your minds to actually pay your self-assessment bill. If this is the case then you may be wondering how you will be penalised for doing so.
For those that have filed their self-assessment tax return before the deadline but have not paid the bill, there will be interest accruing at 2.75% pa for the first 30 days.
However, after 30 days from the deadline the full amount of tax due will be subject to a 5% penalty. This means that if you had a liability of £5,000 unpaid by midnight on 2 March 2017, there would be an immediate fine of £250 added to your account.
Similarly, if after 6 and 12 months from the filing deadline you have not paid the full balance, then there would be additional 5% penalties on the tax outstanding at those dates.
Furthering the example above, should there still be an outstanding debt of £5,000 on 1 August 2017 then an additional £250 penalty will be accrued and if the debt has still not been settled by 1 February 2018 then another £250 will be added. This means that within just 12 months, a £5,000 tax bill will have penalties totaling £750.
On top of this there will also still be interest accruing on both the tax and penalties. Making the estimated amount owing on 1 February 2018 £5,887.
Sam Jefferson, Accounts & Tax
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