Gary Perrens, TaxAssist in Sudbury, answers your questions
3rd February 2016
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I filed my tax return on time, but I could not afford to pay my tax bill.  What should I do? 


Your balancing payment for this year (2014/15) and if applicable, an instalment for next year (2015/16) were due by 31st January 2016, together with your tax return.

If you cannot pay your tax bill, you should call HM Revenue & Customs’ (HMRC) Business Payment Support Service (BPSS). HMRC will ask you probing questions about the business and your cashflow, to ascertain why you can’t pay your tax. If they think you genuinely cannot pay your tax they may grant you an extension to settle your taxes in or agree a payment plan.

However, HMRC will not reduce the amount outstanding and they will still charge you interest. You should do this as quickly as possible, as they tend not to look so favourable on taxpayers who have already missed the deadline. If they do grant you an extension, you will be expected to set up a direct debit. You must keep these payments up to date and pay your other tax. If you don’t, HMRC will normally cancel the arrangement and take legal action against you straight away.

If you don’t feel confident in negotiating with HMRC, feel free to contact your local TaxAssist Accountant who would be happy to liaise with HMRC on your behalf.


I am yet to file my tax return. What penalties can I expect?


You will be issued with an automatic late filing penalty of £100; irrespective of your tax liability or what tax you had outstanding at the time of filing.

However, if you will file your return within the next three months, you will avoid the next wave of late filing penalties which are £10 per day- for up to 90 days. Further penalties are applied when the return reaches over 6 and 12 months overdue of the higher of £300 or 5% of the tax outstanding. Each of these penalties are all in addition to one another; not in place of.

If you have any tax outstanding, interest will begin accruing immediately, and late payment penalties will begin being imposed after 30 days.

If you’re struggling to keep on top of your tax affairs, your local TaxAssist Accountant would be happy to take care of them on your behalf- leaving you to concentrate on running your business. Feel free to contact us to be put in touch with your local office.

About the Author

Penny W

Member since: 17th March 2014

Hello! I'm Penny from thebestof Sudbury, shouting about the best local businesses from Hadleigh through the Clare. When I'm not doing that, you'll find me knitting socks or tending to my 6 chickens

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