It shared a reminder on X stating: “There’s one week to go for Self Assessment customers to make their payment on account. While you’re making your payment, why not also submit your 25-26 tax return? This means you’ll have six months to budget for any tax you owe.”
‘Payment on account’ allows Self Assessment taxpayers to split their tax bill into two installments instead of having to pay the total all at once. It is due by midnight on January 31 and July 31 each year.
People who need to make payments on account will be able to see how much they owe for each deadline on their Self Assessment statement or through their online HMRC account. Missing these deadlines could see people racking up daily interest charges, late payment penalties, and the longer the bills are left unpaid, the higher these charges can go.
Similarly, if you miss the deadline to file your tax return it will also trigger penalties worth hundreds of pounds depending on how late your filing is. Self Assessment tax returns are due each year on January 31.
Even filing just a few hours late in the early morning of February 1st will trigger a £100 penalty. Another £10 penalty is added for each day you wait after the deadline for the first three months, up to £900, and the penalties continue to climb from there.
You can file your Self assessment tax return any time after April 5, the end of the tax year you’d be filing for. HMRC guidance notes that the earlier you send the return, the earlier you will be able to find out what you owe and budget for it.
Additionally, if you discover the bill is more than you’d be able to pay by the time the January 31 deadline rolls around, you’ll have more time to organise for help and support.
Citizen’s Advice recommends calling the Income Tax Helpline as soon as possible on 0300 200 3300 in this situation. The charity notes: “HMRC phone lines are often busy. The best time to call is between 8am and 11am on Wednesdays, Thursdays and Fridays – but you might still have to wait in a queue.”
Once you get through the queue, you can ask about a ‘time to pay agreement’. This is an agreement between you and HMRC that won’t change how much you owe, but may give you more time to pay the bill or schedule smaller instalments that you will be able to afford.
During this call, you’ll need to explain to HMRC in detail why you can’t pay your tax bill. This may include answering questions about your spending, finances, income and household bills.
Citizens Advice adds: “It’s usually easier to get an agreement before the deadline rather than after you’ve missed it. You might still be able to get one after the deadline, so it’s always worth calling HMRC.
“You’ll be charged interest for however long it takes you to pay off your income tax debt. This starts from the first day the payment is late.”