What Could Happen if You Do Not Pay your Taxes?
Failure to pay taxes can be unintended such as when miscalculations or mistakes happen. However, some taxpayers intentionally report less of their income to reduce the amount of taxes. Tax evasion is a serious offense where one illegally avoids due tax payments. HMRC has different ways of handling this, and the action will depend on a number of factors such as the amount you owe and the willingness to pay the due amount. It is best to contact HM Revenue and Customs (HMRC) if you think you will fail to pay your tax for they have support services that will work out a reasonable solution.
HMRC can claim back unpaid taxes through the following ways:
Salary or pension deductions. HMRC can make deductions by changing your tax code but this applies only to self-assessment taxes and National Insurance payment debts. The amount depends on the taxpayer’s earnings.
Collection agencies. HMRC partners with private debt collection agencies to recoup the money from unpaid taxes.
Take possessions. They can also take your goods and sell them, but the taxpayer will be charged for the costs such as auctioneer fees.
Direct recovery. This will be taken under special circumstances, such as when there is repeated refusal to pay the money. Written warning will be sent before this happens.
Court proceedings. HMRC can take the case to court if there is refusal to pay the owed taxes. They can reclaim using bailiffs, closing the business or making it bankrupt.
What to do if you miss a payment date
Once you receive a Tax Return, you are obliged to submit a completed one. Otherwise, HMRC will fine you and issue a determination or estimated tax bill that stands until you send the correctly completed Tax Return. You can replace this for three years from the filing date. If you think you don’t need to submit the Tax Return, call HMRC and ask them to withdraw the return. If they agree, you no longer have to file it and worry about penalties.
If you think you cannot pay on time, contact the HMRC office to avoid paying interest and penalties. One of your options is to plan instalment payments online. HMRC may offer more time for you to pay if they think you are willing to do so but not yet in full. Explain your circumstances to them, or pay the interest.
Tax evasion is a criminal offence that can lead to fines and even jail time. The extent of results depends on the seriousness of your intention. It is best to pay taxes on time to avoid the repercussions. Paying taxes can be confusing. You might not be aware that you are paying yours incorrectly. Accountants in Central London can help you accomplish this task and make it simpler for you, so you can meet your legal obligations on time.