What’s so special about Midnight 2 March 2016?
It might seem like just another day…
But for some people it could be hellishly expensive. Here’s why.
Any tax due for the year to 5 April 2015 should be paid by 31 January 2016. After that you have to pay interest – currently 3%.
On a tax bill of £10,000 that works out at 82p a day. Pretty cheap borrowing really.
Here’s the catch though. Any tax not paid 30 days later – 2 March – gets hit with a surcharge of 5% on the whole lot. That’s an APR of more than 60%.
Here’s a few key facts:
- The surcharge doesn’t apply to payments on account.
- HMRC expect payments to be made on time – even if the tax returns are late. Think about paying an estimated amount.
- You can get the surcharge suspended by entering a ‘time to pay‘ arrangement with HMRC. Do this before the payment is due though.
As usual – if you need more help then get in touch.
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