TaxPersonal TaxQ&A: Tax debt collection

Q&A: Tax debt collection

Each month Frank Haskew of the ICAEW and Francesca Lagerberg of Smith & Williamson provide practical advice on topical tax issues.

Tax Debt Collection

Now that the main self-assessment deadline has passed what happens if tax due was not paid on time?

Any tax left unpaid by the due date deadline (31 January) is of course subject to interest payments. The rate of interest charged is roughly in line with the average rate for borrowing and is currently 6.5%. There are also surcharges that can be levied, the first one being a 5% surcharge on unpaid tax which is imposed if the tax is still outstanding at the end of 28 days after the due date.

In addition the Revenue is changing its approach to tax collection. It has stated that it will make increasing use of daily penalties proceedings for outstanding self-assessment returns, which can amount to £60 for each day the return remains due after notification of the relevant commissioners’ direction.

The Revenue is also making use of call centres to target those who have tax outstanding and to telephone the taxpayer reminding them that tax is due and to initiate discussions on how those tax debts should be met.

The Revenue started by targeting calls at those taxpayers with debts due of over £5,000, although the calls are not limited to such individuals.

It was initially believed that these calls were to be made only to unrepresented taxpayers but that has not proved to be the case and various tax advisers have reported receiving phone calls from the Revenue asking for their client’s telephone number in order that a debt chasing call can be made.

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