Sorry but I have looked at IR web site and googled but can't find.
My assessments went in yesterday and my accountant has told me how much I owe.
If I am late in paying what are the penalties and is this noted anywhere in respect of credit worthiness/checks.
Ken
Very basically interest will run on the outstanding liability from
31-01-2006. A surcharge of 5(?)% will apply on the outstanding balance from 28-02-2006. Credit checks should not be affected although if it goes more to enforce the debt possibly but not sure.
My accountant says he never pays his by the end of Jan as he can get better interest rates by investing the money than the interest rate charge by IR on late payments.
Ken
I find that hard to believe. The interest rate on late payments is 6.5%, or 11.5% including the surcharge if paying after February, so the investment return has to compete not only with 11.5% *net*, but must also cover the £100 penalty.
Who's he investing with? The Mafia?
Perhaps I misheard him!!!
Where on the IR website is this explained. I must be thick as I can't find it.
Ken
Thanks for that.
Now what was I doing wrong earlier when I was trying to find it.
I have been through lost connections all days but that is a different story.
Ken
Surely the £100 penalty only applies if he fails to submit the return as well as fails to submit the tax?
Perhaps you're right. The late-filing penalty is the lower of £100 and the amount of tax in due course found to have been unpaid on 31 Jan, and it seemed feasible to me that a similar penalty would apply to late payment even with in-time filing, but I'm not sure.
It doesn't seem right because it would encourage slovenliness: "If I'm going to be fined for paying late, I might as well file late, it won't cost me any more." But then if revenue raising rules supreme, they might be quite keen to encourage slovenliness.
In the context of Ken's accountant's alleged strategy, I guess he'd be hard pressed to find a reliable investment returning more than
6.5% net even without it having also to cover the extra £100.
I am just going to pay my dues. Its easier.
Ken
In message of Thu, 26 Jan 2006, Ronald Raygun writes
You've got that wrong.
There is only a penalty if you file your Return late. And it's £100 (or the amount of tax payable is less than £100).
If you've filed your TR in time then there's no penalty.
If you pay your tax late then interest is charged at 6.5%pa on a daily basis. If there is still tax unpaid on 28th February then there is a surcharge of 5% of the amount then owing.
However if you are late in filing AND paying, and let's say your tax bill is £52, then you owe £52 plus interest from 1/2/06 on that until paid, and you also own a fine of £52 (being less than £100) on which there is no interest.
DF
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