Surcharge
From February 28, the Inland Revenue will be levying a five per cent surcharge on all unpaid tax, 28 days after the original deadline of January 31. Additionally, interest will be payable on the surcharge if it is not paid within 30 days of the date of the notice.
All overdue taxpayers who continue to delay settling their full tax liability will incur a further surcharge of five per cent on the tax still unpaid by 31st July 2005.
Those who succeeded in clearing their final bill but who owe extra tax due to an enquiry will have 30 days after the enquiry’s completion (the closure notice) to pay the tax if they are to avoid a five per centsurcharge on that additional liability.
These charges, which are potentially expensive for the taxpayer, exist in addition to the interest of 7.5 per cent per annum charged on any unpaid tax, which begins to accrue as soon as 31st January 2005 deadline passes. The overriding message is that taxpayers need to pay overdue taxes and any surcharges promptly to avoid spiralling costs.
Armoury of penalities
Ian Young, Technical Manager at the ICAEW said: "The Inland Revenue has an armoury of penalties to act as a deterrent against those who fail to pay their taxes.
"The longer payment is delayed the more expensive it will get. It is important people are aware of this so that they don’t spend their hard-earned money on surcharges and interest."
Automatic charge
These charges will come as an added blow to those self-assessment tax payers who failed to file their self-assessment forms before the clock struck midnight on January 31. The failure to submit the tax return itself carries its own set of penalties. There is an automatic charge of £100 on any late return and this will be doubled on July 31 if the self-assessment form still has not been submitted to the taxman. For continuing failure to submit the tax return, a daily penalty of £60 can also be levied.
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Susie Hughes © Shout99.com 2005
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