Information for Individuals and Companies
that have Direct Tax
Liabilities
If you have received a notice by HMRC stating that you owe
taxes, it is important to contact their office immediately to
go over their assessment and to figure out if a mistake has
been made. Many times an incorrect tax code or classification
can be the catalyst for HMRC requesting an incorrect amount of
taxes. By contacting HMRC, requesting an assessment on the tax
liability and then checking over your documents and
calculations can help to alleviate any mistakes or further
disputes.
If you have found that a discrepancy or mistake has occurred,
you should immediately contact HMRC or your local tax office
with the intention of submitting records or evidence that
proves an incorrect tax code or mistaken calculation has
occurred. In certain cases, you may want to seek professional
helps such as an accountant or tax advisor on the matter. If
you are unable to pay for professional help, there are a few
non profit organizations that may be willing to help you
including; Citizens Advice Bureau, Tax Aid, etc. Information
regarding these organizations can be found at the following
link: http://www.hmrc.gov.uk/howtopay/prob-indiv-comp.htm
If you checked over your paperwork, tax code and calculations
and realize that an error has occurred in which HMRC is correct
in the tax liabilities you owe then it is important to make
provisions with HMRC to settle any liability by the due date
issued in your notice. If you are unable to pay the full amount
of your tax liabilities by the due date requested, you should
immediately contact HMRC to discuss your situation.
There are two main ways that one can pay off their tax
liabilities; the first is in a lump sum usually within a period
of 28 days or less. The next type of payment option is to pay
smaller amount over a longer period of time (installments). In
many cases, an installment period can last from three months to
about 3 years. In this case, the repayment agreement will be
managed by the Debt Management Service.
When contacting HMRC to request a payment plan, you should be
ready to discuss the following points;
Why you aren’t able to pay the full amount immediately,
* How much money can you pay immediately- in order to minimize
any penalties, interest charges or surcharges
* A proposal that would enable you to pay the full amount
* If your proposal requires you to pay in installments over a
period of one month or more, you might be asked to submit
information on your current income, savings, assets, etc.
In most cases, if a reasonable and realistic proposal is
requested, HMRC will agree to it. Make sure that if this
agreement was made over the phone that they send confirmation
outlining the agreement in writing.
Two things to consider when making a repayment agreement with
HMRC, first off, you will need to complete and submit any
outstanding tax filings before a repayment plan can be
negotiated. Secondly, you will not only need to submit money
for taxes owed during your repayment plan, but also current
taxes due during the plan.
If you refuse to pay your tax liabilities or are still unable
to pay after a repayment plan was created, in most cases
enforcement methods will be used to secure payment. Enforcement
methods can consist of the following:
* Distraint - This method involves the seizure and subsequent
sale of goods by public auction.
* Proceedings in the Magistrates’ Court- This method involves a
court order to send the baliff to take your goods and sell them
at public auction. This sale is used to raise money to pay off
your debt.
* Bankruptcy or Insolvency- This method can mean the loss of
your business and assets.
* Proceedings in the County Court- This method asks for an
order of payment. If payment is not received, your goods and
assets are subject to sale to raise money to pay off your
debt.
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Top
For more information on this topic, please visit the following
link:
http://www.hmrc.gov.uk/howtopay/prob-indiv-comp.htm
Source:
http:///www.hmrc.gov.uk/howtopay/prob-indiv-comp.htm
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