The number of British taxpayers who are falling well behind on their tax bills has continued to climb, according to research.
About 117,000 people are now more than six months behind, according to accountancy Moore Stephens, meaning they have received the second of two penalties of five per cent of the tax they owe. This time last year, the figure was 110,000 people.
As well as the overall 10 per cent penalty, late payment interest charges are also slapped on. When they reach 12 months, taxpayers are hit with another five per cent charge.
Researchers said the struggling UK economy has had a direct impact on people paying their bills on time.
Moore Stephens tax specialist Tim Woodgates said: “The steady flow of people getting in trouble with their tax bill has suddenly picked up a pace. That’s a real problem as the charges they are incurring are just going to push them even further into arrears.”
Government ‘must look again’ at how to help taxpayers
Those with volatile income such as the self-employed are particularly at risk, said researchers, while personal insolvencies have risen by 14 per cent in the last year.
Moore Stephens said HM Revenue and Customs’ (HMRC) methods of collecting taxes are likely to increase financial stress for those who can not pay up.
Methods such as the so-called direct recovery tactic, in which HMRC is able to take money directly from people’s bank accounts, were highlighted.
“HMRC must look again at how it can proactively help taxpayers manage their payments without large fines. A quicker process to agree a ‘standstill’ on a bill would help” Woodgates said.
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