If You Do Not Pay Your Self Assessment Tax Bill

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Updated on : 10-Dec-2024   06:48 PM GMT | 4 min read

Self Assessment Tax Bill Non Payment

Paying tax to HMRC is necessary to avoid fines & penalties. If you do not pay your tax bill, HMRC will take enforcement action upon you to get money.

You need to contact HMRC on time in order to avoid enforcement action. Numbers of enforcement actions taken by HMRC to get money are as follows –

1. Collection of tax through your earnings or pension
2. Taking help of debt collection agencies to collect money.
3. Take money directly from your bank account or building society (In case you are living in England, wales or northern Ireland)
4. Take your owned things & sell them
5. They can take you to the court
6. They can close down your business or make you bankrupt.

You may need to pay interest on your outstanding tax amount in case you are not paying HMRC on time. You may also need to pay a penalty or surcharge.

How to avoid Enforcement action?

In order to avoid enforcement action, contact HMRC as soon as possible. HMRC may provide you with these two options –

1. Pay in installments
2. Get more time to pay your tax bill

In case you disagree with the tax decision, contact HMRC as soon as possible. For ex – tax amount HMRC asked you to pay.

Through your Earnings or Pension

HMRC can collect money for debts by deducting the owed amount from your salary or pension for –

1. Self-Assessment Tax
2. Class 2 National insurance

HMRC changes your tax code in order to deduct money from your account for tax purposes.

In case you have paid too much in tax credits, HMRC can take back money by this way or by making deductions from your universal credit payments.

How much deductions are made?

HMRC can deduct –

1. Up to £3000 in case you are earning less than £30000
2. Up to £17000 in case you are earning more than £90000 or more.

HMRC will tell and explain you in writing before the start of the next year that your tax code will change when we make deductions.

If you do not want debt included in your tax code

In such cases, you need to either –

1. Pay the full owed amount to HMRC, or
2. Contact HMRC and arrange a payment plan to pay your owed tax in installments within a stipulated period.

Debt Collection Agencies

HMRC can collect debt through a private debt collection agency. In such case, Not HMRC but private debt collection agency will write to you and you have to pay them directly.

Some of the debt collection agencies used by HMRC are –

1. Advantis credit Ltd.
2. BPO collection Ltd.
3. Bluestone credit management Ltd.
4. 1st Locate (Trading asLCS)
5. Fredrickson international Ltd.
6. CCS collect (also known as commercial collection services Ltd.)
7. Drydensfairfax Solicitors
8. Moorcraft
9. Past due credit solutions (PDCS)
10. Marston regulated services Ltd.
11. Walker love

Taking control of goods (distraint)

In case you are living in England, Wales or Northern Island, HMRC will take control on your owned things and sell them in order to recover the debt money. It is known as “Taking control of goods”. Certain fee has been charged to you in such cases.

What happens when HMRC visits you?

Any officer or representative may visit your place and ask you to pay your debt. In case you do not pay, list of possessions will be made by the representative officer that is sold later on to recover the debt as well as the cost incurred on selling them. For ex – Auctioneers or advertising fees.

These possessions are either –

1. Taken immediately by the officer
2. You need to sign a “Controlled goods agreement with HMRC (“Walking possession” in Northern Ireland). In this case, goods are sold by HMRC if you will not pay the tax amount within 7 days of HMRC’s visit.

If the goods are sold for more than the amount you owe, anything over the bill is paid back to you. In case goods are sold for less, you have to pay the difference.

Enforcement Action Fees

England & Wales

Northern Ireland

From your bank or building society account

In case you are living in England, Wales or Northern Ireland, HMRC can collect the money you owe directly from your bank or building society account. It is also known as direct recovery of debts.

HMRC take this action in the following circumstances –

1. When you reportedly refused to pay the amount you owe to HMRC.
2. When HMRC visit you to discuss your debt
3. When you have at least £5000 in your account after taking the debt.

If HMRC Takes Money from Your Account

HMRC will write to tell you –

1. What they are planning?
2. What will be the process?
3. How to contact them in case of any query

Court Action

In case HMRC takes you to the court, you need to pay the following –

1. Tax you owe
2. Court fees
3. HMRC cost

Magistrates Court England, Wales & Northern Ireland

HMRC can start magistrate’s court proceedings against you in the following cases –

1. In case you are having separate debt of £2000 each or less
2. In case you have owed money under a year

A summon has been provided to you by the court before hearing explanation about –

• What you owe
• When the hearing will take place
• Where the hearing will take place

In case you pay, HMRC will not take you to the court.

In case you are disagree with the amount decided by HMRC, contact them before going to the court.

In case you do not pay HMRC, they can ask the court to –

1. Send bailiffs to acquire and sell things owned by you in order to recover the debt amount.
2. Close down your company or make you bankrupt

County Court England & Wales

In this case, court will explain you in writing –

1. How much you owe
2. What you need to do

In case you are disagree with the amount decided by HMRC, you may need to go to court for explanation.

In case you do not pay HMRC, they can ask the court to –

1. Send bailiffs to acquire & sell things owned by you in order to recover the debt amount.
2. Deduct money directly from your earnings
3. Close down your company or make you bankrupt
4. Order some other person who owed your money to pay your debt
5. Place a charge on your property

Sheriff Court Scotland

In Scotland, HMRC take the help of Sheriff Court in order to collect debt from you by way of warrant. You will be given 14 days from the date of warrant to pay the tax amount.

In case you do not pay, HMRC can ask the court to –

1. Deduct money owed by you directly from your pay or from your bank account
2. Acquire & sell certain goods from your business premises or your property
3. Close down your company or make you Bankrupt.

Related Topics

• Self Assessment Tax Return
• Sending a Self Assesment Tax Return
• Self Assessment Tax Return Deadline
• Self Assessment Tax Return Penalties
• Amend Self Assessment Tax Return
• Tax Return for Deceased Person
• File Your Tax Return Online
• Register for Self Assessment Tax Return
• Keep Your Tax Records
• Self Assessment Tax Bill
• Pay Self Assessment Tax Bill
• If you cannot pay tax bill on time
• If you do not pay your tax bill
• Claim a Tax Refund