PAYE debts, Tax payments or repayments, Non-resident landlords

Next week, once the dust has settled, we will analyse some of the most urgent tax changes announced in the Autumn Statement. In the meantime we have tips on how to deal with phantom PAYE debts, and a practical issue concerning the SA tax payments and repayments due in January. There are also new forms and new guidance for non-resident landlords.


This is an extract from our topical tax tips newsletter dated 26 November 2015 (5 days before we publish an extract on this blog). You can obtain future issues by registering here>>>

Tax payments or repayments 
Helping clients with their tax affairs involves more than just computing the numbers. Many individuals need support with budgeting to pay their tax liabilities, and reminders about when and how to pay. 
  
January is probably the worst month in which to find the funds to pay tax bills. Many small businesses see a reduction in trade after Christmas, and the weather can discourage customers. New businesses may have to find 150% of their annual tax liability, if the individual was previously taxed under PAYE. These problems can lead to taxpayers reaching for their credit cards to pay the tax due.       
  
If they do pay by credit card, there is a non-refundable fee of 1.5% of the amount paid. Payments by debit card don't attract a fee. But a debit card can't be used if the funds or overdraft facility don't already exist in the taxpayer's bank account.   
  
A taxpayer facing a significant tax bill on 31 January 2016 may want to spread the bill over several credit cards. However, from 1 January 2016 HMRC will restrict the number times debit or credit cards can be used to pay the same tax bill. HMRC hasn't indicated the maximum number of card transactions which will be permitted against each tax bill. 
  
If the taxpayer needs to spread their self-assessment tax bill over several months, the HMRC budget payment plan should be considered. But this requires forward planning as all self-assessment debts must be paid before starting on a budget payment plan. 
  
When your client is really stuck for funds, they can to ask HMRC for a time to pay arrangement before the due date for the tax arrives (or you can do this for them), by calling the business payment service: 0300 200 3825. 
  
Where your client is due a repayment of tax from their SA tax return, HMRC want to make that repayment electronically directly to the taxpayer's bank account. This is only possible if the bank account number and sort code have been accurately recorded on the SA tax form. 
  
A new feature in the HMRC software for completing SA tax returns now checks that the bank sort code entered is a valid sort code, and that the format of the account number entered is correct. An error message will ask the preparer to check and amend the entries if a fault is detected. 
 
This is an extract from our topical tax tips newsletter dated 26 November 2015 (5 days before we publish an extract on this blog). You can obtain future issues by registering here>>>

The full newsletter contained links to related source material for this story and the other two topical, timely and commercial tax tips. We've been publishing this newsletter weekly since 2007; it's clearly written and focused on precisely what accountants in general practice need to know about each week. You can obtain future issues by registering here>>>