Are you looking for help with tax problems?
The advice around this topic can be in abundance but not always helpful, especially if you are trying to navigate the ‘mine field’ that is HMRC. Our article is here to help give you some tips so the need to look for help with tax problems in any variety could be minimised.
Tax issues take many forms and can be as simple as an enquiry about a tax related matter or a return due in to more complicated issues surrounding tax arrears.
HMRC arrears play an ever increasing part in today’s larger debt problems across the UK. With many banks and lenders offering large overdrafts and extending credit facilities to more individuals and businesses than ever, it’s perhaps not difficult to see why.
Published in 2018, HMRC noted that the tax gap was £33 billion.
What is the tax gap?
The ‘tax gap’ is the difference between the amount of tax that should, in theory, be collected by HMRC, and what is actually collected. So not much then!
The old adage that ‘prevention is better than cure’ has never been truer than in the context of HMRC and tax arrears. We are here to help with tax problems and have put together our tips for taxpayers and businesses to avoid owing arrears to the tax man.
Register for tax: Many newly Self-Employed or those with second incomes from other sources are aware they need to register with HM Revenue and Customs, yet fail to do this. Some may think this helps defer a tax bill, let’s them get some income in firstly, before worrying about paying taxes. However, this can result in penalties, interest and charges and in more serious instances of tax avoidance persecution.
Keep up-to-date: If you receive a tax return from HMRC, deal with it on time. Apart from the fact you can incur penalties and surcharges for late filings, HMRC can also decide how much tax an individual should pay – This will be an estimated bill unless you get your return in, preferably on time.
One form of help with tax problems is a Time to Pay Arrangement – A monthly re-payment plan with HMRC. However, if there is tax owing from earlier years, the Revenue will not generally consider allowing a Time to Pay Arrangement unless all outstanding tax returns have been submitted.
Complete paperwork on time: There are time limits set with HMRC not only for the filing of individual or business based returns but also for notifications about changes, make sure you are aware of what applies to you and your business (dependant on how it is set up to trade).
If you are newly Self-Employed you need to register with HMRC within 3 months of the business commencing trading. As a rule, the tax man waits for no one.
Check all paperwork: HMRC may be asking you to pay a tax bill, it does not always mean that this amount is correct. Always check any calculations and statements of account against your tax returns and check against any payments you have made. In some instances, penalties and charges could be reduced owing to errors – Don’t be afraid to query anything with HMRC.
Save and plan for your next bill: This may sound obvious but some people are too tempted to spend the money they work hard to make, sometimes a little more too. However, even something as easy as opening a separate bank account for your upcoming tax and saving on a regular basis could help ease the pain of that next tax bill.
Don’t forget too about National Insurance payments – If you have an accountant, they can help or basic information is available online https://www.gov.uk/self-employed-national-insurance-rates/
Don’t bury your head in the sand: Escalating debts can have a paralysing effect on some individuals and businesses. So many clients come to us looking for help with tax problems after ‘burying their head in the sand.’
It may be tempting to ignore the issue and hope that it goes away. Of course, life isn’t that simple. Arrears to HMRC can quickly escalate as charges and penalties will be applied, Meaning that a small amount originally owed, once ignored, can become unmanageable.
If in doubt or in difficulties – Get help: Preparing and filing returns can be daunting. Sometimes taxpayers are reluctant to seek help owing to concerns over costs of hiring a ‘professional’. Trying to save that cost is probably false economy. The cost of ‘getting it wrong’ could be a huge, unexpected bill from HMRC.
Many accountants and professional firms offer fixed rates nowadays and they will work with you to build a support package that suits you and your business. There are also free organisations out there that can help with tax problems and can advise you, such as TaxAid and The Low Incomes Tax Reform Group.
If you can’t pay a tax bill – Seek help: If you do find that you genuinely need help with tax problems and can’t pay a tax bill in full and on time, don’t wait for HMRC to start chasing you. It is better to confront the issue head on.
If the problem is tackled quickly and arrangements agreed upon, surcharges could be suspended. HMRC are more likely to be receptive and sympathetic towards temporary cash flow issues if you try and resolve the problem and keep the lines of communication open. You may feel intimidated or lack the confidence to deal directly with HMRC, if so, seek help as soon as possible. There are professionals in this area that could help you negotiate with HMRC.
There is help at hand – You are not on your own.
Many taxpayers are in the same situation when they end up in arrears with HMRC. Everyone’s goal is to be able to afford to pay all their bills on time and in full but sometimes things don’t go to plan. Surfing the ‘world wide web’ can be informative and HMRC’s own website can be of help too.
There are also specialised companies out there such as Tax debts Help and Advice who are specifically set up to negotiate the ‘mine field’ that is HMRC. At Tax Debts Help and Advice, you will find the team very friendly and approachable, easy to talk with and understanding. So if you need any help with tax problems, call 0800 448 0293 or visit our website to start a live chat www.taxdebtshelpandadvice.com or follow the link to our contact page.