Many people are finding paying their payments on account difficult this year, but may have more time than they think.
A technical glitch at Barclays Bank last Friday, 31 January, inadvertently revealed the little-known deadline for HMRC’s first late payment charges. The system failure prevented some Barclays customers, and potentially others, from paying their tax on time, highlighting that the deadline for payments on account was sooner than many had realised.
In a statement regarding Barclays online technical issues, an HMRC spokesman told MailOnline: ‘We’re aware of the issues with Barclays bank and are working closely with them to minimise any impact on self-assessment customers. Our services are working as normal, so customers will still have been able to file their returns on time. Also, the issues will not result in late payment penalties as they don’t apply until 1st March.”
Citizens Advice suggests if you don’t speak to HMRC to arrange a time to pay agreement, they’ll charge penalties. “You’ll be charged a penalty when your payment is 30 days late, on 3 March – unless it’s a leap year, when you’ll be charged on 2 March. You’ll also be charged another penalty again when the payment is 6 and 12 months late.”
Regardless if you have tax to pay, if you have failed to file a self-assessment return form by 31 January 2025 at midnight, you will be fined an initial £100. On top of the initial £100 penalty, a charge of £10 a day is applied after three months up to £900 if a return is still not submitted. If after six months you have not pad the late filing fine, an additional £300, or up to 5% of the tax bill will be applied and another £300 or 5% after 12 months, depending on which is the larger figure.
What are HMRC’s interest rates for late payments?
HMRC interest rates are set in legislation and are linked to the Bank of England base rate. There are 2 rates you have to be aware of. First, there’s the late payment interest, set at base rate plus 2.5%. Then there’s the repayment interest, set at base rate minus 1%, with a lower limit of 0.5% (known as the ‘minimum floor’). “The repayment interest rate compensates taxpayers fairly, when they overpay, for loss of use of their money,” says HMRC.
When do you not have to submit a self-assessment form?
There are certain parameters that require you to submit a self-assessment form and certain conditions that mean you do not.
According to HMRC you might no longer need to send a return because, for example:
- You no longer rent out property
- You no longer pay the High Income Child Benefit Charge
- Your income is below the £150,000 threshold
- You are no longer self-employed
You can tell HMRC that you no longer need to send a tax return by filling in an online form – you’ll need to sign in to submit the form online using HMRC’s digital assistant or by phone or post
You can check if you need to send a tax return if you’re not sure.
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What to do if you can’t pay your tax bill on time – Freelance Informer
