Self assessment tax warning

People who ignore the September 30 self assessment deadline are being warned they could face serious financial problems according to a leading tax expert.

The alert comes from, Mark McLaughlin, a Fellow of the Chartered Institute of Taxation and consultant to newly formed company Taxdebts, as around nine million people prepare to fill in self assessment forms for the last tax year.

HM Revenue and Customs (HMRC), formerly known as the Inland Revenue, is trying to collect millions of pounds in unpaid taxes and it hit the headlines recently after it sought powers to claim some of this money directly from taxpayers’ bank accounts without a Court Order.

People must fill in paper tax returns by the end of this month if they want HMRC to calculate the tax owed and tell them what to pay by the following January 31.

Those who miss the 30 September deadline will have still have their tax calculated by HMRC, but it cannot guarantee to calculate how much is owed before the payment deadline. This means taxpayers could get it wrong and incur late payment interest and surcharges with no time to raise the additional funds.

Even the rich and famous have recently fallen foul of the HMRC after it was revealed chart toppers The Cheeky Girls are facing bankruptcy over an unpaid VAT bill. The celebrity pair Monica and Gabriela Irimia are being chased for an undisclosed amount.

Mr McLaughlin, who works as a consultant to tax debt specialists Taxdebts, which aims to help people who have fallen behind in their payments to the taxman, said: “People need to be aware of important dates on the tax calendar. Missing them can have disastrous consequences.

“While the 30 September deadline is not as critical as the 31 January filing and payment deadline, it should not be taken lightly.

“People are busy and often put off dealing with their tax affairs and some will no doubt see the September 30 deadline as not that important. However failure to complete their returns could potentially add to their pressures unnecessarily, unless they seek professional help.

“A spiralling pattern of delayed tax payments, interest and surcharges can develop, resulting in the tax authorities taking recovery action. This action can involve anything from telephone calls or visits to the business premises by the tax collector or seizing assets.

“The financial burden of tax arrears can lead to business failures in the most serious cases, and even personal bankruptcy.

“The position for taxpayers seems likely to worsen in the future, with tighter tax return filing deadlines being introduced in 2008, and new legislation in the pipeline giving the Revenue possible wider powers to collect tax arrears.”

TaxDebts, www.taxdebts.co.uk is part of the AIM listed Sterling Green Group, says its new service will benefit the taxman and those who have fallen behind in their taxes by agreeing suitable repayment figures.

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Source: http://www.taxdebts.co.uk