Admittedly, it is very difficult to manage debts. This is especially true for small businesses that do not have a stable and reliable cashflow. Among the different debts that SMEs might get wallowed into, tax debt is probably the most difficult to get out of. Generally, if you don't settle your tax debt immediately, another set of tax penalties will be charged to your tax bill. Good thing there is such a thing as Special Relief, a unique tax arrangement that will give corporate taxpayers more leeway in settling their tax bill.
As it is, Special Relief is most commonly seen as the last resort for business owners who need to settle their tax debts but couldn't do so prior to the tax return deadline. However, it is important to note that not all corporate taxpayers are eligible for Special Relief. In fact, you need to meet certain qualifications before availing it. Here are some of them:
- If the taxpayer attempts to pay the tax bill and thus makes it questionable for the HMRC to seek for additional tax penalty.
- If the taxpayer has made prior tax payment arrangements with the HNRC.
- If the taxpayer has never claimed Special Relief in the past.
If you pass these qualifications, the next step is to declare some pertinent information about your tax bills, such as:
- Declare the claim as stipulated in the Taxes Management Act of 1970.
- Confirm to the HMRC that they have never claimed Special Relief in the previous tax season.
- Validate that their tax returns were previously up-to-date.
Managing tax debt is not easy. While the UK taxation laws provide a number of options like Special Relief, it would be so much easier to pay your taxes in full prior to the deadline.