Self-em­ployed owe £1.6bn in late tax

Daily Express - - NEWS - By Hanna Geissler

THE self-em­ployed owed £1.6bil­lion in late tax pay­ments last year, ac­coun­tants say.

And that mas­sive to­tal is ex­pected to rise even fur­ther as many re­turns have still not been filed.

Ex­perts say it will prob­a­bly sur­pass the pre­vi­ous year’s record of £1.83bil­lion.

The value of tax owed by those who have missed the pay­ment dead­line has been ris­ing for the past three years, ac­cord­ing to Her Majesty’s Rev­enue and Cus­toms.

Na­tional ac­coun­tancy group UHY Hacker Young said tax­pay­ers are find­ing it im­pos­si­ble to pay their bills on time as the UK econ­omy strug­gles.

Part­ner Neela Chauhan said: “The vast ma­jor­ity of tax­pay­ers are fully in­tend­ing to pay on time. “How­ever, they face a lose-lose sce­nario when they find it hard to do so. They could ei­ther choose to pay the full amount on time, risking the long-term health of their busi­ness or ca­reer be­cause of the hit on their cash­flow, or ac­cept a po­ten­tially hefty fine fur­ther down the line.” Ex­perts said the rise could also be linked to in­creas­ing numbers of self-em­ployed peo­ple, many of whom are fil­ing self­assess­ment re­turns for the first time. There was a record 4.93 mil­lion self-em­ployed peo­ple in March. The ac­coun­tants said HMRC’s sys­tems can be hard to un­der­stand for new users.

Mat­ters are made worse by strict fines levied against those who pay late – miss­ing the dead­line by 30 days can mean a fine of five per cent of all tax owed.

Ms Chauhan said: “As the num­ber of self-em­ployed peo­ple con­tin­ues to rise, the money owed through late pay­ments is also likely to mount.

“Many com­men­ta­tors have sug­gested that HMRC is be­com­ing in­creas­ingly ag­gres­sive when chas­ing down debts.

“Tax­pay­ers would like to see the Rev­enue be more flex­i­ble and give them a bit of lee­way when man­ag­ing pay­ments.”

Neela Chauhan...many face lose-lose sce­nario

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