ATT: Taxpayers must seek HMRC support amid “enormous” financial strain

ATT: Taxpayers must seek HMRC support amid “enormous” financial strain

Nearly six million self-assessment taxpayers are still yet to file returns

ATT: Taxpayers must seek HMRC support amid “enormous” financial strain

Self-assessment taxpayers feeling the pinch of the UK’s recessionary climate and cost of living crisis should seek urgent support from HMRC as the January 31 deadline looms, according to the Association for Taxation Technicians (ATT).

Against the backdrop of rising inflation, it is “more important than ever” that taxpayers attempt to take advantage of HMRC’s payment plans, known as Time to Pay arrangements, said Senga Prior, chair of the ATT’s Technical Steering Group.

“Time to Pay arrangements can provide extra time to pay without incurring late payment penalties,” Senga said in a press release.

According to the most recent measurements by the Office for National Statistics, the UK’s Consumer Price Index inflation stands at 10.7%.

Senga added that in spite of the potential penalty respite, taxpayers should be mindful that interest will still be charged on any overdue amounts at the current interest rate of six per cent per annum.

HMRC currently imposes an automatic penalty of £100 for those who miss the self-assessment tax deadline. For further delays, penalties of up to £1,600 can apply.

Senga also warned that anyone who applies should be aware that HMRC is not obliged to agree to a Time to Pay arrangement.

“[This] is another reason why anyone who knows they will struggle to pay their tax should get in touch with HMRC as soon as possible.”

The ATT’s guidance also noted that some self-assessment taxpayers will be able to apply quickly and easily online, where a decision can be made without the need to speak directly to HMRC.

To be eligible to do so, they must meet certain conditions, such as owing less than £30,000, applying within 60 days of the payment deadline, and planning to pay off any debt within the next year.

Those who owe more than £30,000 must apply by phone.

Nearly half of tax returns still unfiled

On 3 January 2023, HMRC published data revealing that nearly half (5.7 million) of the 12 million individuals expected to file a tax return for the 2021/22 tax year are yet to do so.

Similar figures emerged just one week prior to the January 2022 deadline, with 4 million self-assessment returns still unfiled at that stage.

However, in light of financial difficulties faced by taxpayers during the pandemic, HMRC announced earlier in the month that they would waive penalties for one month for later filing of tax returns and late payments.

HMRC has since confirmed that no such respite will be applied for the 2023 deadline.

The data published in January 2023 also revealed that 129 customers submitted their tax returns on or shortly after midnight on January 1, while more than 25,000 tax returns were filed on New Year’s Eve.

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