There are several cases among us in the UK that do not keep the money aside to deal with the year-end tax liabilities, if you are the one and you are dealing with a shortage of money, we have to go it all cover as you can now opt the option of paying tax bills in installments. There has always been a demand of initiating such a process that can help people to deal with the burden of the tax. There is a payment plan by HMRC which is known as the TTP. This is the abbreviation of Time to pay which allows taxpayers to have the benefit of paying their self-assessment tax returns in instalments. This is the kind of plan that spreads the cost so that the taxpayers can manage the payments easily.
Moreover, because of the recent increase in threshold, a lot of people are getting inclined towards this payment plan. The wonders of time to pay scheme is handling a lot of lost cases among taxpayers. In the case of the individuals who are self-employed, the spread payment plan will be of a 12 months duration. You will have to be considerate about the interest rate also.
This applies to the percentage of 2.6. You are free to have a choice as to how much amount you will pay in the period of one month or one instalment. There are multiple queries regarding the basic facts about tax bill instalments. This post will help to gather information about paying tax bills in the instalments possible, what is the professional way to calculate self-assessment tax returns in the UK, what is the result of missing out on a deadline, and how to check an already paid self-assessment tax return.
Paying your tax bills on time and accurately is a daunting and time-taking exercise. AccountingFirms can help you in managing your taxes and pay your taxes on time with the help of professional accountants.
Paying Tax Bill in Instalments – Is it Possible?
When you are not prepared enough to pay the tax bills on time, you are still able to meet the deadline. This is by the generosity of HMRC schemes which is known as the time to pay plan of instalments. This plan allows you to pay the self-assessment tax returns in instalments. There is a specific time period decided for this purpose. You will get the choice of deciding how much you plan to pay within one instalment. The interest rate standard will also be applied to this amount. This depends on the amount of your tax bill that will decide the amount of interest as well.
All you have to do is simply get in touch with HMRC by using the business payment support service. If this option does not suit you, you can use the government gateway ID for this purpose also. The due date for the self-assessment tax returns is the 31st of January. This is applicable when you are using tax returns by electronic medium. However, if you are using a paper medium, you will have to be considerate of the margin of working and the 31st of October will be the due date in such a case.
How the Professionals Calculate the Self-Assessment Tax in the UK?
When you opt for the benefit of the payment plan budget, you will be all set and ready to pay the monthly payments. This is possible to pay in advance also. Using the direct debit section of the government gateway ID, you can do it in a simple way. People often wonder how professionals tend to calculate the self-assessment tax. Your multiple sources of income that come under the category of taxable income are all calculated together. However, you can deduct the allowable expenses and the personal allowance from this amount. The tax rate then will be applicable for every income source you are using to earn. If a tax is already paid, this amount can later be deducted as well.
What Will Happen if You Miss out Self-Assessment Deadline?
When you fail to submit the self-assessment tax returns before the deadline approaches, you will have to deal with hefty fines and other relevant penalties. This happens when you are not ready for the timely submission and you have not kept the money aside to deal with the tax year end liabilities. In such a scenario, you can either get in touch with HMRC and ask for the leniency period if you have a solid reason.
HMRC will ask for a few records and proofs to see if you are a potential individual to trust and what is your history of paying the tax. On the other hand, you can even opt for the instalment plan before missing out on the deadlines because this can make you pay more than you expected. If you fail to pay, you can end up in jail as well.
How to Know that Self-Assessment is Already Paid?
There must not be any confusion about whether a payment is already been made or not. Because the medium of government gateway ID is easier to check whether a self-assessment tax return is paid. You can even get in touch with the HMRC over a phone call for this kind of general enquiry. HMRC will require a few pieces of information to confirm the right individual over the phone call and then share the required information.
The Bottom Line
Now that you have gathered a fair amount of information about paying tax bills in installments, we can bring the discussion towards wrapping up. The instalment plan is really helpful if there is no way out to pay the self-assessment tax returns on time.
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Disclaimer: All the information provided in this article on paying tax bills in installments, including all the texts and graphics, is general in nature. It does not intend to disregard any of the professional advice.