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Taxpayers who did not pay their tax bill for 2006/07 by 31 January 2008 can expect a further penalty charge on 28 February.

Thursday 28 February is the date when people are charged an automatic 5% surcharge on top of the amount still owing, plus additional interest payments, warns ACCA (the Association of Chartered Certified Accountants).

Chas Roy Chowdhury, head of taxation at ACCA, says: “31 January isn’t just about sending your tax form in on time; it’s also about paying on time. HMRC leaves 28 days to allow people who did not pay at the end of January to do so.”

But what should people do if their tax return is still late and if they cannot pay their tax? Roy-Chowdhury explains: “A late tax return coupled with non payment of tax by 28 February means that the taxman will estimate the amount due – which they call a “determination” of tax to be paid. If this determination is believed to be wrong, then the self assessor must issue a completed tax return for the figure to be changed – and again they will be liable to penalties and surcharges because the return will still be late.

“The best thing to do is make sure the taxman knows when you can pay. It is important to keep your tax office aware of when they can expect payment. There is little opportunity to avoid HMRC’s charges, which are designed to deter late payment, and the impact soon adds up. Interest is charged from the due date – 31 January – and an additional five per cent surcharge is imposed on any of the final tax bill which is still unpaid six months after it was due.”

When it comes to paying tax, here is the timetable of events:

•  January 31 2008 - If the tax bill for the previous year was over £500, HMRC will ask for an advance payment, or ‘payment on account’ for the current tax year equal to one half of the previous year’s bill, again by the end of January.
• 28 February 2008 - An automatic 5% surcharge could be made if tax payable for the year 2006/07 has not been paid in full by 28 February 2008.
• 6 April 2008 - New tax year starts. Self Assessors will receive a Notice to Complete a Tax Return called a SA136.
• 31 July 2008 – This is the second important date for those who make ‘payments on account’. Each payment will normally equal one half of the previous year’s tax liability. A payment on account will have been made on 31 January in the tax year and this is then followed by a payment on 31 July following the tax year. If a second payment on account for the tax year ending on 5 April 2008 is needed, then this is the date by which it should be paid. A second automatic 5% surcharge is levied if people were due to pay tax on 31 January 2008 and it has not been paid in full by 31 July 2008.
• 30 September 2008 - If sending a paper Tax Return for 2006-07, this needs to be sent back to HMRC if the self assessor wants the taxman to collect tax through their tax code.
• 30 December 2008 – This is the deadline for sending in a tax return on-line if the taxman is to collect tax through someone’s tax code.

And the process rolls onwards, with a December-time request from HMRC for payment, called a ‘Statement of Account’. This statement asks for payment of tax owed for the previous tax year by 31 January -  the ‘balancing payment’.

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ACCA