When you start a business, you learn very quickly that generating revenue and controlling costs are the two most important things that determine your success (or otherwise). When you know that a certain action will cost you money then it’s sensible to try to avoid it.
However, according to press reports, around “One million self-employed workers and investors have not filed taxes due in January and many are now expected to face millions of pounds in fines from HM Revenue & Customs.”
HMRC gave businesses a month’s grace on the tax due because of the pandemic, so the normal 5% surcharge didn’t kick in this year until the end of March. HMRC’s leniency only extended so far though and now over a quarter of a million people have had to pay a 5% fine, on top of a £100 fine for not filing by the end of February.
Given that many businesses have struggled due to the pandemic, whacking businesses with additional charges is not going to make their lives easier, however, with the government needing tax revenue and UK firms currently owing over £65billion (this is 72% more than before the pandemic began), we doubt there will be further leniency on the part of the authorities.
Most of our clients at M&S are up-to-date. If your business is struggling, or even just worried about meeting its tax bill, feel free to contact us for advice. First though, get in touch with HMRC because you can change to a monthly payment plan for your tax (over 665,000 are already doing so). But, whatever you do, don’t put off till tomorrow what you need to do today and, as a result, continue to rack up fines.
Vivian Linstrom, M&S Accountancy & Taxation Ltd.