31 January 2012
Many individuals don’t have the cash to pay their tax by the 31 January so HMRC charge interest and penalties on any outstanding liabilities.
You must pay any tax you owe by 31 January following the end of the tax year. For example, for the tax year 2010/11 (ending on 5 April 2011) you must pay any tax you owe by 31 January 2012. This will be:
- any tax you still owe for the 2010/11 tax year
- the first of two ‘payments on account’ for 2011/12 tax year
If you do not have the money to pay your tax liability you should ring HMRC on 0845 366 1204 (have your tax reference available) and try and agree a timescale to pay your tax. You will receive threatening letters and phone calls from HMRC collection officers but try and arrange and meet a regular payment plan to clear your liability.
| Penalties for paying late | |
| Length of delay | Penalty you will have to pay |
| 30 days late | 5% of the tax you owe at that date |
| 6 months late | 5% of the tax you owe at that date as well as the 5% above. |
| 12 months late | 5% of the tax unpaid at that date as well as both the 5% penalties above |
The penalties above do not apply to any payments on account that you pay late.
Interest charges if you pay late
You will also have to pay interest (currently 3%) on anything you owe and haven’t paid, including any unpaid penalties, until HMRC receives your payment.
Example
Mr Short’s tax for the 2010-11 tax year is £1,000 due on 31 January 2012. HMRC don’t receive it until 5 Aug 2012 so he will have to pay £1115 in total.It is over six months late so he will have to pay all of the following:
- 5 per cent of the tax unpaid at 1 March (30 days after the date the tax was due)
- 5 per cent of the tax unpaid at 1 August (five months after the first penalty)
- Interest on all outstanding amounts, including any unpaid penalties which is currently 3%