• 01 Sep 2016
  • Nov

Paying tax should be easier now that HMRC accepts payments through the Faster Payments system. This can be used to transfer funds almost instantaneously, on any day of the year, 24 hours a day.

The maximum transaction value is £250,000, but individual banks have their own limits, which can be as low as £10,000 for business accounts. Remember to check your own bank’s transaction limit if you plan to pay a large bill, such as VAT, using Faster Payments. Where the limit is not sufficient to cover the VAT bill the whole payment will fail, resulting in a late payment.

If your business made one or more late VAT payment or return in the previous 12 months, the next de- fault could result in a surcharge penalty. This will range from 2% to 15% of the late paid VAT, even if your payment is only one day late. Businesses with turnover un- der £150,000 are permitted to make more defaults in a year be- fore suffering a surcharge penalty, which is only applied where the penalty exceeds £400.

Paying HMRC from an overseas bank account is more difficult, as the tax- payer needs the IBAN number and bank identifier code for the HMRC bank account. These details are published on GOV.UK. But be careful to pick up the IBAN number for the account specific to the tax you are paying: there are different accounts for different taxes.

Landlords beware!
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