The recession has brought many changes to the way HM Revenue and Customs (HMRC) deals with taxpayers. An increase in HMRC’s general aggressiveness has appeared alongside the advent of the much-touted ‘time to pay’ agreements for businesses experiencing cash-flow problems. However, as has been recently reported, HMRC are taking a tougher line on time to pay agreements and these are becoming more difficult to negotiate.
The problem for many people arises when HMRC demand that a credit card is used to settle the tax bill: not only is HMRC entitled to interest (and in appropriate circumstances, penalties) for late payment, but they also levy a further 1.25 per cent charge for credit card payments.
Add to the this the fact that credit card interest runs at rates between 15 per cent and nearly double that and it has to be said that use of a credit card to settle a tax bill can be an expensive solution to your cash-flow problem.
If you have a problem settling your tax liabilities on time, you need to weigh up carefully the pros and cons of how and when you pay.
If you need advice on legal issues surrounding financial problems contact us.