Business

Weekend tax credit and tax payment deadlines alert

Coins on HM Revenue and Customs paperwork Image copyright PA

Thousands of people face a deadline of the end of Sunday to renew tax credits and pay tax owed, or face losing payments or being hit with penalties.

Up to a million people still needed to complete their tax credit renewals in the final week before the deadline.

They would have received information about their annual review notice in a white A4-size envelope, but they can renew online up until Sunday night.

Separately, many of those in the self-assessment system must pay a tax bill.

This so-called payment on account is the equivalent of half the previous year's tax bill, as an advance payment on their next bill. The other half is paid on 31 January.

Tax credits

HM Revenue and Customs (HMRC) warned that anyone who failed to renew their tax credits could be in danger of having payments stopped, or find themselves paying more than they needed to.

"It is great that millions of people have renewed their tax credits or reported changes so far, but anyone who has not done so yet should take action now - it only takes a few minutes to renew online," said Nick Lodge, of HMRC.

Renewals can now also be completed via smartphone apps. The tax credit helpline - 0345 3003900 - is open until 20:00 BST on Saturday and Sunday.

To renew, they will need their renewal pack, their National Insurance number, their and their partners total income for the tax year to April 2016, the 15-digit number on their renewal pack, and details of any changes to their circumstances, such as working hours and children.

Claimants who received notices in a brown A5-size envelope will see their tax credits renewed automatically and are only required to contact HMRC if they need to make any corrections or notify HMRC of any changes to household circumstances.

Those whose notices came in a white A4-size envelope must renew, even if their circumstances have not changed.

Income tax owed

The tax payment deadline affects everyone in the self-assessment system unless:

  • The last self-assessment tax bill was less than £1,000
  • A payment of more than 80% of all the tax owed has already been paid

There are various ways of paying but those leaving it to the weekend are likely to be limited to paying via online or telephone banking, or via the HMRC website using a debit or credit card.

Interest is charged if the payment deadline is missed. After 28 days without payment, following the deadline, a surcharge is 5% of any unpaid tax is levied. This surcharge is repeated after six months.

"This is a massive amount given the era of near zero interest rates," said Chas Roy-Chowdhury, head of taxation at ACCA accountancy body.

An HMRC spokesman pointed out that there was some wriggle room for those who contact HMRC if they are struggling to pay the tax owed.

"If a taxpayer can't pay and calls us before the due date and we agree a time to pay arrangement, they will not incur a surcharge," he said.

"Our reasoning being the taxpayer is making an effort and it would not be fair to hit them with a surcharge, where a time to pay arrangement is in place."

HMRC has been criticised by MPs and the National Audit Office for waiting times for those trying to call at key times, but the tax authority said the service had now improved.

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