What to do if you can’t afford your self assessment tax bill: 5 practical steps to take
With the 31st January self assessment deadline fast approaching, many business owners and sole traders are feeling the pressure. For some, the issue isn’t organisation or effort, it’s simply cashflow.
In this blog post, originally published in Business & Accountancy Daily, Lee Murphy shares practical advice for anyone worried they won’t be able to pay their self assessment tax bill on time, and explains why taking early action can make all the difference.
Can’t pay self assessment bill by 31 January? Here’s what to do
Lee Murphy, Managing director, The Accountancy Partnership
For some small business owners and sole traders, the run-up to 31 January comes with a stressful reality: tax is due but the cash simply isn’t there, says Lee Murphy, managing director of The Accountancy Partnership
When that happens, the goal is to stay calm and take control of the situation early because ignoring it is usually what makes things spiral.
Here are five practical steps to take if you’re worried you won’t be able to pay your self-assessment tax bill in full:
1) Get the exact figure
Don’t plan around a guess. Confirm the final amount due and check what that payment actually includes, because it’s not always as straightforward as people expect.
2) Sense-check your return before you pay
A rushed return can accidentally inflate what you owe. It’s worth double-checking the basics, especially income totals and allowable expenses, before you hit ‘submit’ or ‘pay’.
3) Pay what you can
Even if you can’t pay the full amount, paying something helps you stay in control. It can reduce pressure and stop the situation feeling like an all-or-nothing cliff edge.
4) Get advice early
If you’re unsure what your options are, ask sooner rather than later. The earlier you speak to an accountant, the more breathing room you usually have.
5) Speak to HMRC
The worst thing is waiting until the last minute. If you cannot pay what’s due, it’s better to engage early.
It is always worth remembering if you can’t pay in full, you’re not the only one, but ignoring it is the one move that almost always makes things worse. Treat it like a cashflow problem, not a character flaw: get clear on the number, make a plan, and take the next step.
It’s in HMRC’s best interests to help you pay the tax you owe. You may be able to arrange a time to pay payment plan with them based on what you can afford.
HMRC guidance, Time to pay arrangements
Original article: Can’t pay self assessment bill by 31 January? Here’s what to do | Business & Accountancy Daily
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