It is very important for everyone to be on track with their tax affairs. As a self-employed individual, you are obliged to submit your tax return and pay the tax liability figure on time. When it comes to tax, there are many rules that apply to the self-employed and they vary from person to person. Tax debts have a horrible habit of creeping up on you, mainly because people do not understand the rules.
The first time many people hear about tax debts is when HMRC starts making noise about it. Pretty soon they find themselves looking down the barrel of a threatening letter from HMRC, talking about stacking penalties. Not long after that comes the phone call from the HMRC Debt Management (DM) and Banking people, demanding immediate payment.
One of the most common way to get struck with a tax debt is when filling a Self-Assessment tax return – or when you are supposed to and fail to do so. Even if you do not actually end up owing any tax, if HMRC is expecting a return from you and you do not do it, you are putting yourself at risk of pricey fines.
Why am i being fined?
There are many reasons why the taxman might be awaiting a Self-Assessment return from you…Maybe you are:
- the Director of a company,
- making a little extra by renting out a room
- selling regularly on eBay.
Whatever the reason, if you do not meet the Self-Assessment filing deadlines, you will most probably get a penalty.
How to avoid common mistakes
Another common mistake people make is, they do not read the HMRC letters properly. Either thinking it is an unnecessary leaflet or that the letter does not apply to them. If the letter is addressed to you from HMRC, there MUST be a reason. So, you should approach the letter and take all necessary actions. As failure to do so will result in fines that could have easily been avoided.
HMRC has a wide range of ways when it comes to getting the cash you owe them, some of the ways include:
- Direct Recovery of Debt, where they basically just raid your bank account.
- Selling your personal goods at auctions.
- Bankruptcy proceedings.
For 2019/20 HMRC has extended the deadlines of filling the tax return to 28 February. However, they will still impose interest on the due amount if the tax liability has not been paid off by 31st January 2021. Also, there are a sufficient number of reasons why your tax bill would not match your expectations.
We can help you!
Here at Outsourced we can support you with your tax affairs! We have helped thousands of people declare their income, as well as help them be on top with HMRC. We never allow any clients to be stressed with unnecessary penalties.
We provide an open-door policy for all our clients, which means when you need to contact us you do not have to wait for an appointment. You can simply call us on 0208 249 6007, and our experts will be able to assist you further.
Our full package includes unlimited enquiries with HMRC regarding your tax affairs. This will save your time and unnecessary stress of the tax affairs.
Don’t wait until last minute…Get in touch!
Written by Kazi Ashraf