As implied in the CGT planning article above, the 31 January 2016 was not only the deadline for filing your Self Assessment return online, it was also the date when any underpayment of Income Tax, Class 4 NIC and CGT for 2014-15 fell due for payment, together with your first payment on account for 2015-16.
If you made your payment on time there is no need to read the rest of this article. If you didn’t, and your payments remain outstanding, read on…
- Interest will be charged at 3%, plus potential penalties as follows:
- If your tax is still unpaid by midnight 2 March 2016 you will be charged a penalty amounting to 5% of the tax unpaid
- If your tax is still unpaid by midnight 1 August 2016 you will be charged a further penalty amounting to 5% of the tax unpaid
- If your tax is still unpaid by midnight 1 February 2017 you will be charged an additional penalty amounting to 5% of the tax unpaid.
These penalties apply to the balance owing for 2014-15 and can be increased to 100% of your tax bill if you deliberately don’t pay it.
Of course, you might not get the later penalties – HMRC may have sent round the bailiffs!
So, taxpayers who are financially stretched, and will be paying their tax late, would be advised to call HMRC and agree an affordable payment plan. In that way, they should be able to avoid penalties if they keep up with agreed repayments.