For those dreading communication with HM Revenue & Customs because of potential fines and penalties for late payments, read on.
In another bold move, UC Finance are offering relief from penalties and charges for late payment of Corporation Tax, VAT and PAYE, with their new Tax Finance scheme, allowing those due to incur fines to stay within deadlines at a ‘fraction’ of the impending costs.
As made clear by UCF, ‘the value of the penalties, which HMRC enforces upon late payment of your essential taxes, are astronomical, potentially 100% of the original payment that was due’. It is these statistics that reinforce the necessity of such an initiative, providing financial relief when it is needed most.
Given below is information regarding the scales of penalties for Corporation Tax and PAYE.
All information has been extracted from www.hmrc.gov.uk
Corporation Tax
| Type of failure | Maximum penalty payable |
|---|---|
| Non-deliberate | 30% of the potential lost revenue |
| Deliberate but not concealed | 70% of the potential lost revenue |
| Deliberate and concealed | 100% of the potential lost revenue |
PAYE
Penalty charges for late monthly and quarterly PAYE payments
Note: The first failure to pay on time does not count as a default.
| No. of defaults in a tax year | Penalty percentage | Amount to which penalty percentages apply |
|---|---|---|
| 1-3 | 1% | Total amount that is late in the tax year (ignoring the first late payment in that tax year) |
| 4-6 | 2% | |
| 7-9 | 3% | |
| 10 or more | 4% |
Pinpointing what causes these delayed payments to HMRC, the potential of paying an additional 100% of a Corporation Tax bill would be financially devastating for even the hardiest of business folk, and because of this, UC Finance are offering access to up to £30,000 in a lump sum. This is then followed by further injections of cash with every approved timesheet gathered from a contract. ‘If the initial lump sum isn’t sufficient to repay your total tax bill, then HMRC are often agreeable to re-payment plans, where a regular payment to them will keep the spiralling penalties at bay.’
This initiative launched by UCF will have come at the right time for many, with numerous contractors and self-employed professionals every year succumbing to potentially devastating fines and penalties for late payments from HMRC.
This isn’t news. It is advertising for a solution completely biased to the provider and is completely misleading. Utter rubbish.
This is good news. In my experience Contractors for many reasons find themselves with insufficient cash to pay their Tax Liabilites (being out of contract, sickness or just personal reasons). Banks just do not provide funding to contractors, and accountantcy providers have no solution. This new facility is most welcome to my Contractors and Acountancy Providers who now have a solution. Lets keep the UK contractor workforce supported with new initiatives.