As festive lights brighten British streets and families prepare for Christmas, HMRC is delivering an important reminder to millions of taxpayers: that the Self Assessment tax deadline is just one month away.
Although the holidays and family time are at the top of many people’s minds, HMRC is urging taxpayers to be ready to file their tax returns before the 31 January 2025 deadline. It wants to ensure people are not slapped with penalties after the merry celebrations of Christmas and New Year. HMRC Christmas tax reminder
Flexible Payment Options to Ease the Burden
HMRC is highlighting its “Time to Pay” system, which helps people who might find it hard to pay their tax bills all at once. If you owe under £30,000, you can use that online service to spread payments over up to 12 months without needing to contact HMRC.
However, if you owe more than £30,000, you can still set up a payment plan. But you will need to talk directly with HMRC. All payment plans must be arranged after completing your Self Assessment Tax Return.
So far, more than 15,000 taxpayers have used this flexible option in the Tax Year 2023/2024, showing how important such solutions are in today’s age.
A Simple Process for Tax Management
Setting up a payment plan through HMRC’s online system is quick and easy. Myrtle Lloyd, HMRC’s Director General for Customer Services, highlighted its simplicity and reassured taxpayers of HMRC’s support.
“We are here to help customers manage their taxes. If you are concerned about paying your Self Assessment bill, support is available,” Lloyd says.
Flexible payment options are not just about splitting the cost but also about reducing stress when finances are tight.
Why Planning Matters
The Christmas season often brings surprise expenses, making it easy to forget tax deadlines. However, waiting until the last minute to file your tax return can lead to late fees and extra stress. Filing early gives you peace of mind and access to flexible payment options.
Self Assessment taxpayers include many groups, such as freelancers, landlords and people with extra income. Each group has its own financial problems, which makes HMRC’s flexible payment plans pretty helpful.
HMRC also warns taxpayers to watch out for scams and fraud as the Self Assessment Tax Return deadline approaches.
Don’t Delay: File and Plan
With just weeks to go until 31 January, HMRC’s message is clear: file your return, assess your options and don’t hesitate to seek help if needed. Whether through flexible payment plans or direct support, tools are in place to make tax compliance less daunting during this festive season.
Christmas is all about giving and sorting out your taxes is a gift you can give yourself. HMRC’s flexible payment options might not be a holiday present, but they can provide the financial relief you need to start the New Year without stress.
Don’t let the festive rush delay your tax preparations. Filing your Self Assessment early and exploring flexible payment options can ease stress and help you start the New Year on the right foot. Take action now to avoid last-minute pressure.
FAQs
1. Do HMRC send out payment reminders?
Yes, HMRC issues payment reminders to taxpayers who have outstanding tax liabilities. These reminders are typically sent via post or through digital channels if you’re registered for online services. They serve to inform you of due dates and any penalties for late payment.
2. When can HMRC enquire into a tax return?HMRC can open an enquiry into a tax return within 12 months from the date the return was filed, provided it was submitted on or before the filing deadline. If the return is filed late, HMRC has up to the quarter day following the first anniversary of the actual filing date to initiate an enquiry. In cases of suspected fraud or deliberate misrepresentation, HMRC can investigate up to 20 years back.
3. What happens if you don’t file a tax return in the UK?
Failing to file a required tax return results in automatic penalties:
• One day late: £100 fixed penalty, regardless of tax owed.
• Three months late: Additional £10 per day, up to a maximum of £900.
• Six months late: Further £300 or 5% of the tax due, whichever is higher.
• Twelve months late: Another £300 or 5% of the tax due, whichever is greater.
Interest may also accrue on unpaid tax.
4. How long can HMRC go back for corporation tax?
For corporation tax, HMRC can investigate:
• Up to 4 years: In cases of innocent errors.
• Up to 6 years: If tax has been underpaid due to carelessness.
• Up to 20 years: In cases of deliberate tax evasion.
5. How long does it take HMRC to process a payment?
The processing time for payments to HMRC varies by method:
• Online or telephone banking (Faster Payments): Usually same day or next working day.
• CHAPS: Same working day if made within your bank’s processing times.
• BACS: Typically three working days.
• Direct Debit: Three working days from the date HMRC takes the payment.
• Cheque by post: Allow at least three working days for the payment to reach HMRC, plus additional time for processing.
6. What is an automated payment reminder?
An automated payment reminder is a system-generated notification sent to inform you of an upcoming or overdue payment. These reminders can be delivered via email, SMS, or through dedicated apps, helping ensure timely payments and avoid penalties.
7. How do I send a payment reminder?
To send a payment reminder:
• Manually: Draft and send an email or letter to the debtor, including details like the invoice number, amount due, due date, and any late fees.
• Using accounting software: Many platforms offer automated reminder features that can be scheduled to notify clients of upcoming or overdue payments.
• Via payment apps: Some payment applications allow you to send reminders directly through the platform.
8. How do I check my automatic payments?
To review your automatic payments:
• Bank statements: Examine your statements for recurring transactions.
• Online banking: Log in to your account to view and manage standing orders and Direct Debits.
• Payment apps: Access the app’s settings or payment history to see scheduled payments.
• Contact service providers: Reach out to companies directly to confirm any automatic payment arrangements.
9. Is there a payment reminder app?
Yes, several apps can help manage and remind you of payments, such as:
• Mint: Tracks bills and sends reminders.
• Prism: Consolidates all bills and sends due date alerts.
• Due: Offers customizable reminders for various payments.
10. What is the longest time to pay HMRC?
If you cannot pay your tax bill in full, HMRC may agree to a Time to Pay (TTP) arrangement, allowing you to spread payments over a period, typically up to 12 months. The duration depends on individual circumstances and agreement with HMRC. It’s crucial to contact HMRC as soon as possible to discuss options.
11. What is the maximum money transfer without tax in the UK?
The UK doesn’t impose taxes on the act of transferring money itself. However, taxes may apply based on the nature of the funds:
• Gifts: You can give up to £3,000 per tax year without inheritance tax implications. Amounts above this may be subject to inheritance tax if you pass away within seven years of the gift.
• Income: Money received as income is subject to income tax.
• Capital gains: Proceeds from the sale of assets may be subject to capital gains tax if they exceed the annual allowance.
12. How long does it take for HMRC to send a refund?
HMRC typically processes tax refunds within:
• Online returns: Approximately 5 working days.
• Paper returns: Up to 6 weeks.
Delays can occur during peak times or if additional information is required. You can check the status of your refund through your Personal Tax Account or by contacting HMRC.
13. How many years back can HMRC investigate?
HMRC’s investigation periods are:
• Up to 4 years: For innocent errors.
• Up to 6 years: For careless behavior.
• Up to 20 years: For deliberate tax evasion.
14. What are HMRC penalties?
HMRC imposes penalties for various offenses, including:
• Late filing of tax returns: Starting with a £100 fixed penalty, escalating with continued delay.
• Late payment of tax: Initial 5% of the unpaid tax after 30 days, with additional 5% penalties at 6 and 12 months.
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