Introduction
Are you struggling to pay your income tax bill? This guide will help you understand your options and how to manage your tax arrears effectively. With the right steps, you can ease your financial burden and avoid penalties. If you need additional support, Contend’s highly trained AI legal experts are here to provide guidance and help you resolve your legal issues. Discover how to take control of your tax situation today with Contend, the Easiest Legal Help in the UK.
If you find yourself struggling to pay your income tax bill, especially during challenging times like the COVID-19 pandemic, it’s essential to take action quickly. The good news is that there are options available to help you manage your tax payments without overwhelming stress.
Reach Out to HMRC
The first step is to contact HM Revenue and Customs (HMRC) as soon as you realize you can’t make your payment. They have a dedicated coronavirus helpline for this purpose:
HMRC Coronavirus Helpline
Phone Number: 0800 0159 559
Hours: Monday to Friday, 8 am to 4 pm
Cost: Free to call
You can also find more information on what to do if you can’t pay your tax bill on time here.
When to Call the Income Tax Helpline
If you’re approaching the payment deadline (January 31) and know you can’t pay, or if you’ve already missed the deadline, it’s crucial to reach out to HMRC’s income tax helpline:
Income Tax Helpline
Phone Number: 0300 200 3300
Hours: Monday to Friday, 8 am to 8 pm; Saturdays, 8 am to 4 pm
Cost: Calls are charged at 12p per minute from a landline, and mobile rates vary.
It’s often best to call during the quieter hours, typically between 8 am and 11 am on Wednesdays, Thursdays, and Fridays.
Exploring a ‘Time to Pay’ Agreement
When you call, ask about a ‘time to pay’ agreement. This arrangement can provide you with either more time to pay your tax or allow you to pay in installments. It’s generally easier to set up this agreement before the payment deadline, but you can still request one afterward.
Keep in mind that interest will accrue on any unpaid tax from the moment the payment is late. You can check the current interest rates on HMRC’s website.
Avoiding Penalties
Failing to communicate with HMRC can lead to penalties. If your payment is 30 days late, you’ll incur a penalty, and additional penalties will apply if the payment is 6 or 12 months late. The penalty is typically 5% of the amount owed, plus interest.
If you’re self-employed and have submitted a Self Assessment tax return, you can find out more about potential penalties here.
Information You’ll Need
When discussing your situation with HMRC, be prepared to provide detailed information about your finances, including:
- Your income and household bills
- Other family members’ earnings
- Your spending habits
- Any savings or assets you may have
If you have special circumstances, such as a serious illness or unexpected financial setbacks, be sure to mention these. HMRC may be more lenient in granting you a payment plan if they understand your situation.
What to Offer HMRC
If possible, consider offering a lump sum payment that you can afford. This may increase your chances of being granted a time to pay agreement for the remaining balance. If you expect to owe more than £5,000 after your lump sum, it’s wise to consult with an adviser through Contend’s legal expert chat.
Always ask HMRC to confirm any agreements in writing, so you have a clear understanding of what you owe and the payment schedule.
If Your Agreement is Denied
Not everyone is granted a time to pay agreement, as HMRC evaluates each case individually. If your request is denied, ask to speak to a more senior representative and request a written explanation. If you believe your case wasn’t fairly considered, you can follow the steps to file a complaint here.
Addressing Discrepancies in Your Tax Bill
If you believe the amount you owe is incorrect, contact HMRC’s income tax helpline to discuss it. There are many reasons why your tax bill might be wrong, including mistakes on your part or errors made by HMRC.
If you need assistance sorting out your tax issues and earn less than £20,000 a year, you can reach out to TaxAid for help. They offer support for anyone, regardless of income.
Additional Support
If you’re facing ongoing challenges with your tax payments, consider trying Contend’s legal expert chat for further assistance.
Remember, the key to managing your tax arrears is to act quickly, communicate openly with HMRC, and seek help when needed. You’re not alone in this, and there are resources available to support you through the process. Contend is the Easiest Legal Help in the UK.
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