The Low Incomes Tax Reform Group (LITRG) is urging people with outstanding tax liabilities to take steps urgently to avoid penalties for late payment.
Many taxpayers will have Self Assessment tax liabilities due on 31 January 2018, while others may have tax liabilities arising from Simple Assessments. For the first time this year some pensioners may receive Simple Assessments that will demand the tax due on their state pension by 31 January 2018, or three months after the issue for the Simple Assessment if that gives a later due date.1
HMRC have made changes to the way taxpayers can pay their tax bills. Historically, taxpayers have been able to pay tax liabilities in a variety of different ways, but HMRC no longer accept payment through the Post Office, and will soon stop accepting personal credit cards.
LITRG is concerned that the end of Post Office tax payments may lead some people to struggle to find a way to pay tax by the due date. LITRG is also worried that some people on low incomes may resort to taking loans at rates disproportionately high in comparison to their income because of the ending of credit card payments – pushing them into greater personal debt. It is important that people who find themselves in this position make early contact with HMRC in order to agree terms for payment, rather than incur further debt unnecessarily.
Anne Fairpo, Chair of LITRG, said:
“It is important that taxpayers pay their tax on time in order to avoid late payment penalties and being pursued by HMRC for the debt outstanding. Two recent changes mean that making payments may not be straightforward for some taxpayers and we are keen to see that these changes are publicised as widely as possible.
“If making the tax payment will cause hardship, we strongly recommend people contact HMRC as soon as possible, and certainly before the due date of payment, to discuss their case. HMRC have powers to spread the payment of tax bills where payment would cause hardship. When presenting their case, people should make sure HMRC are aware of any special circumstances that may be relevant, for example illness or an unexpected fall in income.
“Since 15 December 2017 it has not been possible to pay a tax bill at the Post Office. For people with no local bank branch and who are unwilling or unable to use internet banking or telephone banking, making a payment by post may be the only solution. If someone does not have a payslip to make the payment by post, they should telephone HMRC to request a payslip as soon as possible so that their payment may be allocated correctly.
“From 13 January 2018 it will no longer be possible to pay HMRC from a personal credit card. This means taxpayers may have to find alternative sources of funds to make their payment. While credit card charges might be expensive, they are considerably more affordable than some loans.”
An individual who already has a tax debt and is on a low income should visit the Tax Aid website, www.taxaid.org.uk, a charity that can offer assistance in suitable cases.
Notes for editors
1. Currently, around 11 million people have to complete a tax return every year to provide HMRC with information about their income. Making more use of existing data, HMRC can now find the information for some of those customers elsewhere without needing them to complete a tax return. This new system is called Simple Assessment. Customers just need to check that the information is correct, and if it is, they can pay their bill online or by cheque before the deadline in the letter. For more information, click here
2. Most self-employed people and others who have income that is not fully taxed will have tax liabilities due on 31 January 2018.
Low Incomes Tax Reform Group
The LITRG is an initiative of the Chartered Institute of Taxation (CIOT) to give a voice to the unrepresented. Since 1998 LITRG has been working to improve the policy and processes of the tax, tax credits and associated welfare systems for the benefit of those on low incomes. The CIOT is the leading professional body in the United Kingdom concerned solely with taxation.
The CIOT is an educational charity, promoting education and study of the administration and practice of taxation. One of our key aims is to work for a better, more efficient, tax system for all affected by it – taxpayers, their advisers and the authorities. The CIOT’s work covers all aspects of taxation, including direct and indirect taxes and duties. The CIOT’s 18,000 members have the practising title of ‘Chartered Tax Adviser’ and the designatory letters ‘CTA’, to represent the leading tax qualification.