If you do not pay your tax bill on time and cannot make an alternative arrangement to pay, HMRC can take ‘enforcement action’ to recover any tax you owe.

You can usually avoid enforcement action by contacting HMRC as soon as you know you have missed a tax payment or cannot pay on time.

They may agree to let you pay what you owe in instalments, or give you more time to pay.

Otherwise, there are a number of enforcement actions HMRC can take to get the tax you owe. They can:

• collect what you owe through your earnings or pension
• ask debt collection agencies to collect the money
• take things you own and sell them (if you live in England, Wales or Northern Ireland)
• take money directly from your bank account or building society (if you live in England, Wales or Northern Ireland)
• take you to court
• make you bankrupt
• close down your business

If you do not pay your tax on time, you’ll probably have to pay interest on the outstanding amount. You may also have to pay a penalty or surcharge.

Almost three million people have moved off the furlough scheme since March as the economy began to bounce back and businesses reopened, according to new statistics.

This is unsurprising as employers are now expected to cover 20% of any hours not worked with government providing 60%.

It will be sobering to see how the final closing of the furlough scheme on 30 September will affect unemployment rates.

Readers who are still undecided how to respond to these changes will need to make possibly agonising decisions in the coming month.

We can help. Please call so we can help you consider your options.

In a recent news story published on the GOV.UK website, HMRC confirmed that nearly 1.8 million married couples and those in civil partnerships are claiming the Marriage Allowance to save up to £252 a year in Income Tax.

The allowance enables married couples or those in civil partnerships to share their personal tax allowances if one partner earns an income under their Personal Allowance threshold of £12,570 and the other is a basic rate taxpayer.

They can transfer 10% of their tax-free allowance to their partner, which is £1,260 in the 2021-22 tax year. It means couples can reduce the tax they pay by up to £252 a year. Couples can also backdate their claims for any of the four previous tax years, which could be worth up to £1,220.

If you are eligible, and still not making a claim, you can complete an application online at https://www.gov.uk/apply-marriage-allowance.

As most drivers of a company car will be aware, if you have any private use of the vehicle this will result in a significant Income Tax charge. The benefit charge is the way that HMRC levy tax on this benefit in kind; and the higher the CO2 footprint of your company car, the higher the Income Tax charge.

Which is why many company car drivers are now looking at electric vehicles – either plug-ins or self-charging hybrids – as a tax efficient alternative.

For example, if you presently drive a gas-guzzling petrol driven car with a CO2 rating of 145g/km you could drastically reduce your benefit in kind tax charge by switching to a hybrid or fully electric car with a CO2 rating as low as 0g/km. There would still be a tax charge, even at 0g/km, but it would be based on a minimum 1% of the list price of the car when new, rather than 33% if rated at 145g/km.

Company car drivers whose private fuel is paid for by their employer will pay an additional Income Tax charge based on the Car Fuel Benefit charge. This charge is calculated by applying the above percentage rate (33% in our example above) to a fixed figure, £24,600 for 2021-22. Accordingly, the Car Fuel Benefit charge added to the driver’s taxable income would be £8,118.

Interestingly, since 6 April 2018, there is no taxable car fuel benefit where electricity is provided for an electric car. Legislation was included in the Finance Act 2019 with retrospective effect where the recharge facilities are made available to all employees at the workplace.

If an employee recharges a company vehicle at home and is then reimbursed for the cost of the electricity used, this may be challenged as earnings. However, the employee could then make a claim for the electric cost using the advisory rates. Currently this is 4p per mile for fully electric cars.

A final point, employers would also benefit from a shift to an all-electric company car fleet. They are obliged to pay a 13.8% National Insurance charge on the total value of benefits provided (car and car fuel benefits); in which case converting to electric would be an additional bonus.

‘She only makes the tea’ and ‘my employees are on standby’ are just some of the strange excuses used by businesses who have paid their workers under the National Minimum Wage, the UK tax office has revealed.

Every employed worker in Great Britain is legally entitled to the National Minimum Wage, but many employers tried cheating the pay system during the last financial year, according to a new Government report.

HM Revenue and Customs (HMRC) has released the most shameful excuses that employers have used for failing to pay their employees correctly, including ‘my workers like to think as themselves as being self-employed’ and ‘young workers have to prove their worth in the first three months’.

One company claimed their employee is ‘still learning so they are not entitled to minimum wage’, while another thought ‘the National Minimum Wage does not apply to their business’.

Other outrageous excuses for not paying employees the legal minimum wage include: ‘She only sweeps the floors’, ‘they weren’t a good worker’ and ‘I thought it was okay to pay young workers less if they are not British’.

During the last tax year, HMRC assisted around 155,000 ‘short-changed’ employees in the UK to retrieve more than £16 million which was owed to them. In addition, they also distributed more than £14 million in fines.

The Director of Individuals and Small Business Compliance, HMRC, Steve Timewell said: “The majority of UK employers pay their workers at least the National Minimum Wage, but this list shows some of the excuses provided to our enforcement officers by less scrupulous businesses.

“Being underpaid is no joke for workers, so we always apply the law and take action. Workers cannot be asked or told to sign away their rights.”

He added: “We are making sure that workers are being paid what they are entitled to and, as the economy reopens, reminding employers of the rules and the help that is available to them.

The national minimum wage differs for each individual as it is dependent on an employer’s age and experience, with under 23s receiving a lower rate than those older than 23.

The current hourly rates are:

• £8.91 – Age 23 or over
• £8.36 – Age 21 to 22
• £6.56 – Age 18 to 20
• £4.62 – Age under 18
• £4.30 – Apprentice

As part of the government’s plan to bounce back from the pandemic, HMRC is encouraging employees to regularly monitor their pay, cash deductions and any unpaid working time.

To find out more about the National Minimum Wage, click here.