HMRC expected to get ‘much tougher’ on tax bills in 2023 – vital deadline looms in weeks | Personal Finance | Finance

Spread the love

HM Revenue and Customs (HMRC) will be collecting income tax as usual this month through the Self Assessment system. The key deadline for Britons to bear in mind is January 31, 2023 – as 2021/22 taxes must be filed by this date.

A failure to do so could mean taxpayers suffer a potentially hefty penalty, which could compound an already sizeable tax bill.

Accountancy firm BDO has warned Britons not to “bank on too much goodwill” from HMRC when it comes to deadlines.

Dawn Register, head of tax dispute resolution at BDO said: “The number of people filing their tax returns over the Christmas period was down almost 30 percent versus last year.

“HMRC’s warning that there are 5.7 million people still yet to file their returns should be a wake-up call to many that they need to take prompt action.”

READ MORE: Britons need ‘at least £33,600’ for ‘comfortable’ retirement

Now, the Revenue is able to recover some debts directly from bank accounts, ask for security for tax debts, and use bailiffs, for example. 

As a result, BDO is warning taxpayers who are in arrears that HMRC is expected to get “much tougher” when it comes to recovering tax debts in 2023.

Ms Register added: “While HMRC is offering time to pay arrangements to those who are genuinely going to find it difficult to pay their tax on time, they’re unlikely to give any waiver for late filing or late payments and are expected to get tougher on those with outstanding debts.

“Those paying late will also be hit with higher interest charges this year. 

“The late payment interest rate is set to rise to six percent on unpaid taxes from January 6, 2023, the highest rate since November 2008.

“Taxpayers in arrears should take note.”

A time to pay arrangement could be extremely helpful for individuals who know they will not be able to pay their tax bill in full.

Some people might be able to set up a payment plan to pay in instalments, but this must be done through a formal process – and HMRC must be contacted as soon as possible. 

Individuals cannot set up a payment plan if HMRC believes they will not keep up with repayments.

There is no time limit on how long a payment plan can last, as this depends on how much someone owes and what they can afford to pay each month.

Leave a Comment