Income Tax Debt Advice

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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This Guide Includes

1. Income Tax

2. Income Tax Debt

3. Income Tax Errors

4. Struggling to pay your Income Tax?


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Income Tax

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.

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Income Tax Debt

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.

What if the amount I am being asked for income tax is wrong?

There are a number of reasons why your income tax could be incorrect, such as:

  • You are no longer self-employed but did not inform HMRC
  • You made an error on your tax return form
  • You missed the tax return submission deadline and HMRC estimated your income, which will likely result in discrepancies
  • There is a time lag between payments and account updates
  • HMRC may have made a mistake

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.

Struggling to pay your Income Tax?

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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