February 24th, 2020Midnight, 1 March 2020. Why should this concern me?
If you’re up to date on your Self-Assessment payments then this will not be a problem for you.
However, for some, the 2nd March could just be about to become a very expensive day.
Here’s why.
Any tax due for the year ended 5 April 2019 should have been paid by 31 January 2020. After that you have to pay interest, the current rate is 3.25%. So, on outstanding tax of £10,000, this is about 92p per day. Not too bad a rate if you need to buy a bit more time..
Here’s the catch though, any tax not paid 30 days after the due date (ie by close of play 1st March 2020) will be subject to a surcharge of 5% ie £500 on (£10,000 of outstanding tax).
The key facts are:
- The surcharge only relates to unpaid 18/19 tax (not payments on account re 19/20) – try and make sure that you pay at least the 18/19 element of your 31 January 2020 tax bill.
- HMRC expect payments to be made on time. Even if you are late filing your 18/19 tax return, try and estimate the tax due and make a payment to mitigate the surcharge penalty.
- if you are having difficulty making your 18/19 tax payment you can consider requesting a ‘time to pay’ arrangement with HMRC and they will then suspend the surcharge. You must make this arrangement before the surcharge is due.
As always, if we can be of any help, please do get in touch.
