Paying your tax bill
If you took my advice from last issue, you will have now filed your tax return. If you have not done so, you need to take action as soon as possible, as the final deadline is 31st January 2019.
Even if you have already filed your return, there is still one thing that you are likely to need to do. That is pay the your tax and National Insurance bill. The due date for payment is also 31st January 2019. If you fail to pay by that date, then interest will start to accrue on the outstanding balance until you do so. After 30 days, you would also incur a penalty of 5% of the tax outstanding at that date. Additional penalties at the same rate apply after 6 months and 12 months.
To avoid interest and penalties you should plan your payment now. Bear in mind that some payment methods are not instant, so you should factor in any delay to ensure you meet the deadline.
Payments methods that are no longer available
You can no longer pay your tax bill at the Post Office. HMRC will also no longer accept payment by personal credit cards.
Direct TransfersThere are three main ways of making direct transfers to HMRC. These are:
• Faster Payments Accessed through online or telephone banking, this will usually result in the payment being made the same or next day. This even applies if you make the payment on a bank holiday or weekend.
• Clearing House Automated Payments System (CHAPS) This will normally only be needed if you have a tax bill higher than the limit for Faster Payments (from £10,000 to £100,000 depending on your bank). The payment will normally go through the same working day. It will not go through until the next working day if triggered after 5:00pm or at a weekend or bank holiday. CHAPS payments cost £25 to £30.
• BACS This system is more commonly used for regular payments, such as monthly wages. Payments by BACS can take up to three days to process. The advantage BACS payments have over Faster Payments is that they are tied into the Direct Debit system, giving similar protections if there is a problem.
The bank account details for making these payments are shown below. Payment slips from HMRC will usually specify which of the two accounts you should use. If you do not know which account to use, you should use the details for HMRC Cumbernauld. See table below.
Payments made by any of these methods should include your 11 character payment reference. This is your 10-digit Unique Tax Reference (UTR) followed by the letter K. Your UTR will appear on your HMRC online account, and any correspondence they have sent to you. Failure to include the reference will result in your payment going into a suspense account, delaying it being matched to your account.
By debit or credit card online
You can pay by debit or credit card online. As noted above, you cannot pay your tax bill with a personal credit card, but corporate credit cards (e.g. in the name of your personal limited company) can still be used. If a credit card is used, then an additional non-refundable fee will be charged.
Payments by card can be made here (tax.service.gov.uk/pay-online/self-assessment). Your UTR will be requested as part of the process of making a payment. Any payment made by card will be treated as received on the date you process the payment, regardless of when the money is actually transferred by your card provider.
Paying at your bank or building society
You can pay at your bank or building society only if you have an official paying-in slip from HMRC. If you have opted out of receiving paper statements, you will not be able to use this method.
Payments at your bank or building society can be made by cash or cheque. Cheques must be made payable to “HM Revenue and Customs only” and should also have your UTR shown on them. As for paying by card online, these payments will be accounted for by HMRC on the day you make them, not when the money reaches HMRC.
Cheque by post
Cheques will need to be completed with the same details noted above. You will also need to send a payslip with the cheque. If you do not have an official payslip, you can generate one for this purpose only here (hmrc.gov.uk/gds/payinghmrc/payslip-sa1.htm). This payslip cannot be used for making payment at your bank or building society.
Cheques and accompanying payslips should be sent to:
You should allow an additional three to five working days (ignoring bank holidays and weekends) for your payment to reach HMRC if you use this method.
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