When you have a personal tax liability to HMRC, you are required to pay it by the due date specified by HMRC. If you fail to pay your tax liability on time, HMRC will charge you interest on the amount owed until it is paid
HMRC charge daily interest on your personal tax liability. During the last year, HMRC have increased their interest rate from 2.75% per annum on overdue tax to 6%. In a few day’s time, HMRC is hiking their interest rate to 6.5%, on 21st February 2023
HMRC hike late payment interest rate on personal tax liability increase
In a few day’s time, on 21st February 2023 HMRC is hiking its interest rate for late payments of tax to 6.5%.
When is my HMRC tax liability payment due?
Your personal income tax liability payment is usually due on 31st January after the end of the tax year. A second payment can be due on 31 July.
Do you have unpaid tax for 2021-22? Expect a flat rate 5% penalty
Have you missed the payment deadline (31st Jan ’23) for your 2021-22 tax return or for prior years? If yes, you can expect a 5% flat-rate penality from HMRC if you fail to pay by 28th February 2023.
HMRC will repeat this process if you miss the 31 July 2023 liability payment deadline too.
What can you do if you can’t make your payment to HMRC?
If you are struggling to pay your tax due contact HMRC to explore options for a payment plan – click here to find out more.
How to pay your personal tax liability
Did you know that there is an easy way to pay your personal tax liability on your phone? You will need to download the HMRC app and have a banking app installed on your mobile phone. You will need to have a personal tax account, so you can login to your HMRC account.
Check out HMRC’s vlog which shows how the app works
If you do not have a smart phone there are other ways to pay your personal tax liability – click here for more details
HMRC interest on repayable tax has increased
On the plus side, tax-free interest on tax repayable has increased from 0.5% per annum in July 2022 to the current rate of 2.5% per annum (from 6 January 2023) and will increase again to 3% per annum on 21 February 2023.
If you would like to talk to us about looking after your personal or business tax, call us on 01992 444466. We’re experts ready to support you and your business, no matter your company size or sector.
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The information contained above is for general guidance purposes only. Whilst every effort has been made to ensure the contents are accurate, please note that each individual has different circumstances and it is essential that you seek appropriate professional advice before you act on any of the information contained herein. HB Accountants can accept no liability for any errors or omission or for any person acting on or refraining from acting on the information provided in the above
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