What to do if you can't pay your tax bill
If you find you can't pay your tax bill the most important thing is not to ignore the demand. If there's a mistake on the bill, you can get it checked and corrected. If you can't pay the bill straight away, you may be able to come to an arrangement.
When you receive your tax demand or Self Assessment Statement
If you're not sure that the amount's correct
If you're not sure your bill's right it's a good idea to start by checking the figures on your tax return. If you've accidentally added azero to your income, you'll end up with a bill that's much bigger than it should be.
You could also check that you haven't used provisional figures in your return - if you have, your bill will be based on those figures. You will need to submit the correct figures to have the bill amended.
If your tax return figures are right, it may be that your bill includes penalties or surcharges because you sent your return in late. Any such charges will appear on your Self Assessment Statement.
- Understanding your Self Assessment Statement
- Tax return deadlines and penalties
If the amount is correct but you can't pay
If your bill's right but you can't pay it, it's best to contact the Tax Office that sent you the request for payment right away.
Alternatively you can ring the Payment Helpline on 0845 366 1204,open from8.00 amto 8.00 pm Monday to Friday,8.00 amto 4.00 pm Saturday, and10.00 amto 4.00 pmSunday. The helpline is closed on Christmas Day, Boxing Day and New Year's Day.
If you ignore your billHM Revenue & Customs (HMRC)will phone you anyway. If you continue to ignore they may take legal action to get the money. Even ifthey make the first contact you can still askthem to consider agreeing to a payment arrangement.
Each case is looked at individually but normally:
- you'll be expected to pay in one lump straight away if you can
- if you can't pay at once you might be allowed extra time to pay - either in one lump or by instalments
- if you ignore the problem or you can't make a payment arrangement, legal action will be taken to collect what you owe
Payment arrangements - your rights
HMRC considers any payment arrangement you suggest. If you think HMRC has rejected it without considering it properly you can make a complaint, but you can't appeal againsttheir decision.
- How to complain to HM Revenue & Customs
If you've received a demand but haven't sent in your tax return
HMRC won't consider any payment arrangement until you send in any overdue returns.
If you haven't sent in your return(s):
- you will have incurred a fixed late filing penalty
- HMRCwill have estimated your bill
- you may have to pay more penalties - even if you've paid the estimated tax demanded - until the return is filed
If you've received a warning letter about legal action
If you don't pay after HMRC has phoned you, the local recovery office will write to you. You will be warned that if you still don't pay they canstart legal action against you to collect what you owe. You can still make a payment proposal at this time.
How to make a payment proposal
If you agree to pay the full amount within 28 days no further action will be required.
If you propose a longer time to pay you may have to give the recovery office details of:
- your savings and other assets - for payment arrangements up to three months
- your income, spending, savings and other assets - for payment arrangements longer than three months
You'll have to pay interest on any tax you pay late.
Free advice if you can't pay your tax bill
If you want to talk to someone about your tax bill, you can get free advice from the Citizens Advice Bureau or from TaxAid, a charity that helps people with tax problems who can't afford to pay for advice.
More useful links
- Tax and other debts owing to HM Revenue and Customs
- More on Managing debt
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