Cannot Pay.

[Graham1]

Appreciate help..

Self-employed and cannot pay this year, how should I proceed with IR?

Thank you.

[Instinctive]

If you made the profits on which you are charged to tax, where has the money gone?

The tax due for the tax year ended 5.4.04 is normally payable by 1st instalment on account on 31.01.2004, 2nd instalment on account on 31.07.2004 and the balancing payment on 31.01.2005. Additionally, you also have to pay 1st instalment on account of the tax due for the tax year ending 5.4.2005.

Interest is chargeable on all tax paid late.

Additionally a flat 5% penalty is charged on any tax for 2003-04 year unpaid at 28.02.2005; a further flat rate penalty of 5% is chargeable on any 2003-04 tax still outstanding at 31.07.2005.

You are best advised to speak, directly or through your accountant, with the tax collector and agree instalment arrangements to clear your liability. They will certainly need to establish that you are geniunely in a difficult position and that you do not have any other means to find the money. A letter from your bank and also your mortgage company will assist to prove that you have tried all means to raise money. They will normally not wish to entertain instalment arrangements over more than 6 to 12 months.

Finally, you should send in your tax return on or before 31.01.2005 if not already done so.

RP

[Huw Williams]

Do you know how much tax is at stake?

One thought is that if you cannot pay you may not have made enough profit to generate a tax bill. If this is right then you just have to make sure the tax return is submitted.


Huw Williams
Nottingham