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30 December 2002

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31st July tax deadlines - are you affected?

Within the Self Assessment tax system, 31st July looms large: it is one of the Inland Revenue's key tax collection and tax return deadlines. Graham Yeatman, from city based tax experts i.e. taxguard, highlights the key issues.

It might be summer but the Inland Revenue doesn't take a holiday, it is focused on collecting tax payments for the 2000/2001 tax year and chasing up those taxpayers who have not yet submitted their tax returns or paid their tax for 1999/2000. The recent appearance of the lovely Mrs Doyle on our TV screens (the Revenue are spending £5 million on this reminder campaign!) underlines the fact that they will "Go on, go on, go o-o-n" until they get what they want.

So check out the tables below to see if you might be affected and, if so, what you have to do.

  • Those who should review their tax affairs before the deadline:

  • Small businesses operating as sole traders or partnerships

  • Individuals letting property or land at a profit Higher rate taxpayers

  • People with other types of income not taxed at source

  • People who had to pay tax of over £500 in a lump sum for 1999/2000 (where less than 80% of their total tax for that year was deducted at source)

  • Those who have not sent in their tax return for 1999/2000

What you might have to do by 31st July

What happens if you don’t meet the deadline

Make the 2nd tax payment on account for 2000/2001

The Inland Revenue add interest to the bill 

You can apply to reduce your payments on account if:
you are up to date with your tax affairs 

and already know that the actual tax due for 2000/2001 will be less than the payments requested by the Inland Revenue *

An application to reduce payments can be made at any time but the Inland Revenue will charge interest on the reduced amount if this is paid late.

Send in your completed tax return and tax calculation for 1999/2000

You will be charged a second penalty of up to £100.

In cases of extreme delay the Inland Revenue can charge a penalty of up to £60 per day to “encourage” you to send in your tax return.

Pay any outstanding tax for 1999/2000

A surcharge of 5% of the tax due will be added to your bill and continue to build up until the tax is paid in full.

* Normally, the Inland Revenue will accept applications without question: they can charge you interest for not paying the correct amount of tax on time if you have made a mistake in your calculations. They may also penalise you if they can show that your application was unjustified and made solely to improve your cash flow!

The best advice is to make sure you have fully dealt with anything you have been sent by the Inland Revenue that is time critical. Letting the 31st July deadline pass by without making sure you are up to date could be expensive: a missed deadline is a chance for the Inland Revenue to collect more money from you!

Background Notes Taxpayers who have to pay tax on account for the 2000/01 tax year are required to make the second payment by the deadline of 31st July 2001. If the tax is paid late, the Inland Revenue add interest to the bill (currently at 7.5% per annum). Most people required to make a payment should have received a "statement of account" and payslip by now, showing the amount of tax that the Inland Revenue think is due.

If a taxpayer is up to date with his / her tax affairs and already know that the actual tax due for 2000/2001 will be less than the payments requested (i.e. their tax return has been completed), he /she can apply to reduce their "payments on account". Normally, the Inland Revenue does not require any evidence and will usually accept an application without question. The Inland Revenue has the comfort of knowing that if the taxpayer has made a mistake in their calculation they can charge interest for not paying the correct amount of tax on time. They can also penalise the taxpayer if it becomes obvious that the application was made fraudulently.

The second group of people for whom 31st July is a tax deadline are those who have not yet submitted their tax return for the 1999/2000 tax year. These returns should have reached the Inland Revenue by 31st January 2001. Failing to meet that date allowed the Inland Revenue to charge the taxpayer a penalty of up to £100, add interest to any tax that was owing at 31st January and a further 5% surcharge on the tax not paid by 28th February.

If a taxpayer also fails to get this late tax return in by 31st July, a further penalty of up to £100 is payable, interest continues to build up and another 5% surcharge will be added to any tax owed. Further delay after this could provoke the Inland Revenue to charge a daily penalty (up to £60 per day). To date, the daily charge has been reserved for the most serious "offenders". However, it is known (see Recent National Audit Office report) that the Inland Revenue are reviewing their use of this charge!

For more help and information visit

July 2001




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