Over £1.6 billion in tax owed to HMRC by self-employed

Sep 05, 2019
shutterstock_1019116399

According to the latest industry research, HM Revenue & Customs (HMRC) is currently owed £1.6 billion in late tax payments from self-employed individuals for 2017 and 2018.

That figure is expected to rise further, meaning that it could become the fourth year that the amount of tax owed by those who have missed the late payment deadline has increased.

The research found that £1.83 billion was owed in 2016/17, rising from £1.76 billion the previous period and £1.65 billion in 2014/15.

It is believed that tough economic conditions have had a significant increase in late payments with individuals finding it increasingly harder to pay their tax bills.

Taxpayers are in a lose/lose situation as they can risk the long-term health of their business or career by paying the full amount on time, significantly impacting their cash flow, or alternatively accept a hefty fine further down the line as a result of late payment.

There was a record high of 4.92 million self-employed individuals in the UK as of March 2019.

The research also found that there had been a decrease in the amount of tax cancelled by HMRC from 23 per cent (£523 million) in the previous tax year to 22 per cent (£516 million).

Alongside that, the number of penalties adjusted to nil or cancelled has decreased year-on-year for the past five years.

Industry Experts believe that HMRC is becoming more aggressive in its chasing of unpaid tax debts, despite calls from taxpayers to add more flexibility when managing payments.

A spokesperson for HMRC said it would prefer that individuals pay on time rather than receive penalties.

“If customers are unable to pay on time, they may avoid penalties by contacting HMRC as soon as possible and we can discuss whether it might be possible to set up a payment plan,” they added.

 

© Walker Begley 2016. All rights reserved. Registered to carry out audit work in the UK and Ireland and regulated for a range of investment business activities by the Institute of Chartered Accountants in England and Wales. WB Financial Management Ltd is an appointed representative of LJ Financial Planning Ltd which is authorised and regulated by the Financial Conduct Authority. Registered in England and Wales no. 5280582

  • Privacy
  • Terms & Conditions
  • VAT number: 107 1775 25
  • The information required by the ‘Provision of Services Regulations’ is on display at our office.