The 31 July deadline for the second instalment of payments on account is fast approaching, leaving just over one month for owners of professional practices to get their finances in order. Are you one of those businesses?
Due to less publicity surrounding the July deadline, it is often forgotten about until the very last minute. Businesses, distracted by summer holidays, then find themselves under immense pressure to source the money needed to pay their Self-Assessment tax bill.
HMRC enforces strict penalties for late filing and/or payment. You will receive a £100 penalty for late submission and will be required to pay interest on the outstanding amount of tax owed.
For example, businesses are made to pay 5% of tax unpaid up to 30 days of late payment, and then will be given a £10 daily penalty for up to 90 days (max £900). For payments that are 6 months late, businesses will receive a further penalty of 5% of the tax outstanding at that date.
Further action can be taken by HMRC if payment is not made; for example, they are able to seize assets and sell them, collect the amount owed through earnings or pensions, and use debt collection agencies to collect the money from you. If you still fail to make payment, HMRC can take your business to court, or shut your business down.
As a business owner, there's no doubt you want to avoid these penalties at all costs, which means ensuring that you file and pay your tax bill on time.
Tax season is a stressful time for all business owners: a recent YouGov poll revealed that 21% of companies are anxious about paying their tax bill, while a notable 5% claiming that they are terrified. If you don't feel prepared for the July deadline, then we can help.
Many professional practices are turning to tax funding as a simple and effective means to pay their tax without putting strain on their cash flow. Our TaxFunder solution will allow you to spread the cost of your tax bill over six or 12 months, limiting the impact on cash flow and enabling you to utilise working capital where you really need it. Find out more about our tax funding solutions here.