Managing Your Cash Flow
Be warned: Tax payment deadline might be earlier than you think
3 min read
29 January 2015
HMRC has been active again this year in reminding people that the 31st January self-assessment tax return submission deadline is fast approaching. But it could be even sooner than you realise.
You may well have seen one of the slightly irritating ads showing a selection of smug taxpayers sitting in the lotus position and experiencing inner peace having completed their return.
You might also have noticed a tweet from HMRC pointing out that tax payments need to be received by this Friday.
But why Friday? Well, because this year, 31st January lands on a non-banking day (Saturday), the payment deadline for the balance of tax owed for the previous (2013/14) tax year and the first payment on account for the current (2014/15) tax year is actually brought forward to Friday 30th January.
Only those paying instantly using methods such as telephone banking or those using debit or credit cards online will be able to pay up to and including the 31st January.
For other payment methods, for monies to be received by HMRC by Friday, there will be longer lead times.
For example, for payments using Bacs, Direct Debit (if you’ve set one up with HMRC before) or by post, taxpayers will need to allow 3 working days. If you haven’t previously set up a Direct Debit you’re already too late.
Read more about paying your tax:
- 5 top tips when doing your Self Assessment tax return at the last minute
- Popular tax avoidance myths (and how to debunk them)
- How to stay sane at the end of the financial year
But in order to work out your liabilities and how much you need to pay, you will of course also need to complete your tax return. As a result, traffic to HMRC’s already busy phone lines could well peak tonight as taxpayers rush to complete their returns in time.
Another option is to pay at a bank, building society or Post Office. To do so, you need a paying-in slip from HMRC, but it appears that the Department has made things more difficult for some taxpayers by deciding not to send out paper reminders which are usually accompanied by a blank payslip. Some accountants are also reported to be very unhappy that you can only pay up to a limit of £10,000 at a Post Office.
So you have been warned – you may need to act faster than you thought to avoid being charged interest and a penalty!
Mike Down is a tax partner at Baker Tilly.