Help Paying Your Tax

Paying Your Tax

The tax return deadline approaching there will be some people among us that need to settle our tax liabilities by 31 January 2019. This comes at a time when some people will have cashflow problems as this is just after Christmas when the credit card bill have arrived and most of us would have gone 5 weeks since being paid before Christmas.

HM Revenue & customs will always take the stance that it is in the nation’s interest that that everybody pays the rights amount of tax at the right time.

When you have a tax liability it is your responsibility to ensure that it is paid on time whether it is company tax, personal tax, PAYE or VAT.

Deposit Account

One option is to open up a deposit account and once you get paid by a customer you transfer some money across until you have enough in their to settle your tax liability’s and this way you will never be late in paying your tax.

If you trade as a limited company the deposit account should be a business deposit account and not a personal deposit account as the could be tax consequences of having the business cash in your personal account.


In the past I have had clients who cannot meet their tax liabilities on time and when I have spoken to HM Revenue & Customs on client’s behalf a couple of occasions they have stated that they are not a bank and if the client has not got the cash to settle their tax then they should go to the bank for a loan and then clear the tax with this.

Is the bank going to lend the money to someone for this as they will want to know when they are going to get their loan repaid to them?

Time to Pay Helpline

HM Revenue & Customs introduced a time to pay helpline when the country went into recession to help those businesses and individuals who are struggling to pay their tax liabilities.

What would happen is the taxpayer or the business director/authorised person would contact them and they would discuss a payment plan and this would be taken by direct debit over the coming months until this was fully repaid

If you are struggling to settle your tax liabilities you should consider this as:

There are no surcharges of unpaid tax that happen twice a year with personal tax payments.

It then stops the unpaid tax going to debt recovery.

It is easier on your cash flow.

If using this VAT it will stop surcharges on unpaid VAT.

Tax Codes

HMRC can collect debts through PAYE tax codes for future years. If the tax payer is experiencing hardship it is worth thinking about this opportunity even if your tax return was not filed on time.

Remember that the tax code must not collect more than 50% of the income tax, until 2014/15 the maximum that could be collected was £3000 however from 2015/16 this has increased subject to your PAYE income. This could be a significant amount if you pay your tax at 40% or even 45%.

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