HMRC issues warning over late tax payments due imminently
A self-assessment tax return must be completed by anyone who is self-employed or who receives income other than from their regular job, such as from a rental income, dividend or a side hustle. That helps to determine how much tax and National Insurance Contributions they must then pay on those earnings.
While self-assessments must be completed annually by 31 January, a second mid-year payment must be made on 31 July, which goes towards the next tax year bill. That means payments made this month contribute to the final tax payment needed on your 2024-25 tax bill.
Anyone who misses the 31 July deadline will see fines imposed at a high rate of interest – 8.25 per cent on any tax owed – with further penalties possible the longer non-payment continues.
A full breakdown of who needs to make this payment and how to do so can be found online here, but HMRC impose penalties on those who miss this month's deadline, with interest accruing on the unpaid amount from 1 August.
'Prompt payment is important - if you continue to delay, the interest keeps adding up, potentially leading to a much larger tax bill,' HMRC told The Independent.
Additionally, extra penalties can quickly add up if you leave the tax bill unpaid for longer.
While the following apply only if the tax remains unpaid for 30 days or more, they will rapidly mount up:
5 per cent of the unpaid tax at 30 days
Another 5 per cent at 6 months
And a further 5 per cent at 12 months
You do not need to wait until 31 January to pay your bill. You can pay via your HMRC Self Assessment account or by bank transfer, debit card, Direct Debit or the HMRC app.
If you're struggling to pay, HMRC says it's best to take action early. You may be able to set up a Time to Pay arrangement online, allowing you to spread payments over a longer period. You can find more details here on what to do if you can't pay your tax bill on time.
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