January 9th, 2016

What’s so special about Midnight 2 March 2016?

imageIt might seem like just another day…

But for some people it could be hellishly expensive.  Here’s why.

Any tax due for the year to 5 April 2015 should be paid by 31 January 2016. After that you have to pay interest – currently 3%.

On a tax bill of £10,000 that works out at 82p a day. Pretty cheap borrowing really.

Here’s the catch though.  Any tax not paid 30 days later – 2 March – gets hit with a surcharge of 5% on the whole lot. That’s an APR of more than 60%.

Here’s a few key facts:

  1. The surcharge doesn’t apply to payments on account.
  2. HMRC expect payments to be made on time – even if the tax returns are late. Think about paying an estimated amount.
  3. You can get the surcharge suspended by entering a ‘time to pay‘ arrangement with HMRC.  Do this before the payment is due though.

As usual – if you need more help then get in touch.

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Freelancers HMRC Penalties


John manages a wide portfolio of owner managed businesses and oversees the smooth operation of the firm’s payroll department.

After obtaining his degree in mathematics from the University of Liverpool, John joined Jonathan Ford & Co in 2004 and qualified as a chartered accountant four years later. John likes to keep abreast of developments in tax and accounting and is responsible for the mentoring of junior staff.

Outside of work, John enjoys powerlifting and is a Liverpool FC season ticket holder.

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