As the self-assessment deadline looms on January 31st January, the Low Income Tax Reform Group (LITRG) is warning newcomers to self-assessment to budget for payments on account (POA). The warning has been issued after countless first-timers found themselves in difficulty in previous years because they simply hadn’t accounted for the payments, which you must make towards the following year’s income tax (and National Insurance Contributions where appropriate). These are payable only where a tax payer has a tax bill in 2016/17 for more than £1,000.
The POAs are actually a way to help tax payers spread the payments, however, they have come as a shock to many who have simply not been prepared.
There is an option to reschedule spread repayments to HMRC for people who are struggling with tax payments, and the option of a Debt Arrangement Scheme (DAS) may also be beneficial to some. The DAS is Scotland’s statutory debt management plan which gives debtors some breathing space to allow them to repay debts through a payment programme over an extended period of time. DAS’ have now been extended to small and medium sized businesses in Scotland so that they can continue to trade whilst dealing with their debts, avoiding unnecessary business insolvency. In all cases, however, it is highly recommended if you get into any difficulty with paying tax, you should contact HMRC as soon as possible (before the deadline) to inform them of your situation.
Business Debt Arrangement Scheme advice in Glasgow & Edinburgh, Scotland
We understand that facing up to financial challenges can be an extremely difficult and stressful time. However, you should be reassured to know that there are options available and, with the right advice and support, you can take the necessary steps to improve your situation.