You would be hard pushed to find a tax payer who was happy to pay tax. Whatever the economic benefits of taxation, we would all prefer that someone other than ourselves paid the bill.
Disclosing your profits
Companies are obliged to disclose their corporation tax liabilities in the year in which they are charged. Profits are stated net of tax due and any retained profits are available for the shareholders to draw as dividends.
Sole traders and partnerships do not have to disclose current year’s taxation in current year’s accounts. Therefore, conversations about profitability and income tax can be separated.
Hopefully, readers who are self-employed will have settled any income tax due 31 January 2018. If not, HMRC’s debt collectors will no doubt be calling in their dues. There is also the second payment on account for 2017-18 which is due 31 July 2018.
If you have difficulty paying your tax? What is the best strategy?
Without a doubt, it is not burying your head in the sand. HMRC are quite clear in their advice:
Contact HMRC as soon as possible. You will have to pay interest if you pay tax late and you may avoid penalties by contacting HMRC.
If you can’t 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
Nominated partners in business partnerships can negotiate time to pay with HMRC on behalf of the partnership or individual partners.
Getting your ducks in a row
So, if you’ve missed your payment date, or if you’ve received a payment demand, like a tax bill or a letter threatening you with legal action, call the HMRC office that sent you the letter.
Call the Business Payment Support Service if you haven’t received a bill or letter about payment yet.
You will need to convince the person you speak with at HMRC that you have genuine reasons for late payment, so it pays to get your ducks in a row before you call.
For further advice, please get in touch with our team.