Self-employed owe £1.6bn in late tax
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