Act quickly to avoid HMRC's £100 penalty

TAXPAYERS are being warned tomorrow is the last chance to avoid an instant £100 penalty from HMRC if they owe a self-assessment payment on account.

- By Harvey Jones

Too many risk being caught out, either because they don't realise they're affected or think it's something they can put off.

But there's an automatic penalty and escalating fines and interest for those who continue to delay. Taxpayers have to submit their annual tax return by January 31 each year. This week's lesser-known July 31 deadline applies if your tax bill was more than £1,000 last year, and less than 80% of your income is taxed through PAYE.

It can affect the self-employed who make “payments on account” to HMRC. It may also apply to landlords, investors and pensioners with extra income.

If they paid the first tax instalment in January, the second must be settled now. Miss it, and interest starts accruing at 8.25% from day one, with penalties increasing the longer the delay.