Hundreds of thousands of Britons are struggling to pay their tax bills, according to HMRC.
SIX TIMES MORE WORKERS AND SMALL BUSINESS OWNERS are having trouble paying their taxes this year than they were in 2009, when the global financial crisis ended.
According to legal firm Pinsent Masons, a record number of taxpayers have postponed their tax payments with HM Revenues and Customs (HMRC) this year. According to the numbers, about 864,400 taxpayers are currently in Time to Pay arrangements with HMRC, up 38% from 647,770 a year ago and 600% more than those who couldn’t pay during the global financial crisis in 2007 and 2009.
This corresponds to £100 billion in unpaid tax that Time to Pay arrangements have yet to cover.
It’s the result of many people and businesses struggling to pay their taxes during COVID-19, when many small firms were forced to close temporarily and many self-employed workers lost contracts and clientele.
Taxpayers have been given the option of deferring payment of their past-due tax bills through Time to Pay arrangements to deal with financial issues.
Some businesses have found that staggering payments, usually over a 12-month period, has helped them stay viable and resulted in fewer layoffs.
However, according to the most recent data from Pinsent Masons, the number of taxpayers in Time to Pay arrangements is more than six times larger than the 139,300 taxpayers who postponed paying their tax bills in 2010 following the global financial crisis.
In addition, for the 2020-2021 year, roughly £117 billion in unpaid tax has been added to HMRC’s outstanding debts system, which has yet to be covered under Time to Pay agreements.
This is more than double the previous year’s £52 billion.
Anyone having trouble paying their tax bill should call HMRC as soon as possible.
“The findings demonstrate that hundreds of thousands of more taxpayers have sought a Time to Pay arrangement,” said Sam Wardleworth, Associate at Pinsent Masons.
“Undoubtedly, the disruption caused by Covid has raised the pressure on taxpayers to pay their tax obligations, and taxpayers are taking advantage of HMRC’s leniency in this area.”
Taxpayers can defer payment of past-due tax bills by spreading payments over a 12-month period.
Workers may be required to fill out a short online application in some situations, but for larger debts, more thorough evidence is normally required.
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