Nobody wants to be in debt, and being in debt to the tax authorities is likely everyone’s biggest worry. If you receive a tax bill from HMRC, it’s important that you pay it immediately. But what happens if you don’t pay by the deadline given?
Call HMRC and pay all your tax bill if you can!
When you call HMRC following a missed bill, they’ll require you to pay immediately by Direct Debit or debit card should they have reason to believe you can pay it all at that time. If you can pay it all straight away then everything is fine and there’s nothing more to worry about – just try to not miss the bill deadline again.
What happens if I cannot pay the full tax bill straight away?
If you’re unable to pay the whole tax bill in one go then don’t fret too much, HMRC will present you with two possible options:
1) Pay off the bill in instalments via Direct Debit.
2) You’ll be given more time to pay.
The tax authorities may offer to give you more time to pay if they genuinely think you’re not in the position to pay your bill in full now but will be able to in the future. They’ll agree on dates to pay with you and set up a Direct Debit to take these payments. If your circumstances change and you find yourself able to pay your tax bill off sooner, notify HMRC immediately! Also, bear in mind that you’ll have to pay interest on any late amount.
If HMRC do not believe you’ll be able to get back on track with your payments with more time then they won’t offer you additional time to pay and may consider taking enforcement action against you to recover the sum owed if you do not pay straight away.
This can all be avoided by paying your bill on time. Keep a separate bank account, interest bearing if possible, and every month transfer funds into the account, based on how much profit you made that month. That means that when you get that tax bill through the door, you’ve already accrued the funds. So don’t hesitate with dealing with it straight away – missing it could lead to debt recovery efforts against you which is a nightmare scenario for any SME business.
HMRC tax bill – where to find out more
If you really need some help with paying your next tax bill or your quarterly VAT bill, get in touch with us. We can help your business with a 3-12 month tax loan so that you can pay the majority of the bill upfront without eating into your existing working capital. Find out more on our Corporation Tax & VAT Bill page. or get in touch to discuss how we can help.