Income Tax is a tax you pay on your income, you do not have to pay income tax on all sources of income however, and most people in the UK get a Personal Allowance of tax-free income.
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Income Tax is a tax you pay on your income. This includes money you earn from employment, profits you make if you’re self-employed, some state benefits, most pensions, job benefits and income from a trust.
Most people in the UK get a Personal Allowance of tax-free income. This is the amount of income you can have before you pay tax.
Her Majesty’s Revenue and Customs (HMRC) handle debts that relate to Income Tax, National Insurance, VAT arrears and tax credit overpayments. If you owe any of these, it’s vital that you deal with them as soon as possible.
The urgency is because these are considered ‘priority debts’, meaning the consequences of not paying them are serious and include court action, bailiffs – and in some extreme cases, even imprisonment.
There are a number of reasons why your income tax could be incorrect, such as:
When there are anomalies in your income tax payments, you can easily find yourself in arrears (you may not even have known your income tax payments were incorrect). First things first, it is very important that you get in touch with the Income Tax Helpline on 0843 504 7177 or 0300 200 3300 to discuss your options.
Struggle to make a payment, speak to them before it’s missed – and if you’re in a position to make an overpayment, do so – it can help buy some breathing space if you have a tighter month further down the line.
Speak to them today, make arrangements to pay what you can afford – and keep in contact every step of the way.
While many personal debts can be caught up with and action prevented, even late into proceedings – HMRC are more formal and their processes are often less forgiving then other creditors.
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