UK Taxpayers With Outstanding Liabilities Face HMRC Surcharges

by Jason Gorringe, Tax-News.com, London

24 February 2009

Business and financial adviser Grant Thornton is warning individuals who still have outstanding tax and National Insurance (NI) liabilities for the year ended April 5, 2008 that a surcharge will be imposed by HMRC at the end of February.

Tax and NI liabilities for those individuals in the income tax self assessment system, for the year ended April 5, 2008 were due to be paid by January 31, 2009. However, those who have all or part of their liability still outstanding at February 28, 2009 are liable to a surcharge equal to 5% of any outstanding liability. This is known as the "initial surcharge", a further surcharge of 5% being payable six months after the due date (July 31, 2009).

"In the current economic climate many people may be having difficulties meeting their liabilities. The surcharge due on February 28, on any tax unpaid has the potential to give rise to a substantial charge for some individuals, adding further pressure to those already struggling," says Francesca Lagerberg, Head of National Tax, Grant Thornton.

Taxpayers may wish to appeal against a surcharge where they have a "reasonable excuse" for not having paid the tax on time. If a taxpayer has insufficient funds to pay any outstanding tax liability, then surcharges may be avoided if they contact HMRC to make "payment arrangements" before the surcharge becomes due.

"The advice to those in the income tax self assessment system is to check if they have outstanding liabilities and to get in touch with HMRC as soon as possible to avoid the surcharge. In these uncertain economic times, this is a tax burden that taxpayers can do something about," concludes Lagerberg.

Recommended