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Can you go to jail for not paying taxes (UK)?

  • 3 min read
  • Last updated 20 Dec 2022

Can you go to jail for not paying taxes? One of the most frequently searched questions on the net. So, can you? Read below to find out. 👇

Why do people not pay their taxes?

HMRC probably asks the same question all the time. 😅

But there are many reasons why people don’t pay taxes, including:

  • They don’t know they have to
  • They don’t know how to
  • They don’t want to pay tax
  • They forget
  • Their accountant fails to file their tax return on their behalf

Regardless of the reason, deliberately not paying the tax you owe is a crime. And as usual, crime = punishment.

So, can you go to jail for not paying taxes in the UK?

It’s not unheard of. Each situation is assessed differently but yes, there is a possibility of being sent to prison for not paying taxes. 

Here are some cases of people going to jail for not paying their taxes:

Back in March 2022, a self-employed plumber was jailed for twelve months for not paying income tax or national insurance over a ten-year period. He owed a whopping £91,000 in unpaid taxes.

Similarly, in 2015, a company director was sentenced to six-years imprisonment for evading tax of around £100,000. 😮‍💨

This doesn’t mean if you’ve mistakenly not paid your taxes, you’ll immediately be handcuffed and thrown in HMP Belmarsh. 

In this case, you should let HMRC as soon as you’re aware of the mistake. You’ll most likely be investigated which will determine what happens next. If you are able to prove not paying your tax was an innocent error, you might just avoid the wrath of HMRC.

Are there any other punishments for not paying taxes in the UK?

Yes! Again, all cases are assessed individually, so there isn’t one standard outcome for not paying your taxes. After all, the reasons for not paying tax can vary. 

Some other punishments for not paying taxes in the UK include:

  • Paying anything between 10% and up to 200% of the tax due
  • Community service
  • Seizing assets such as cars and clothes

What if you pay your taxes late?

If you file your tax return late, you’ll receive a £100 penalty. This could be more if your payment is over three months late. 

You can appeal penalties for late payment if you have a reasonable excuse. This could be reasons such as:

  • You’ve experienced a serious injury/illness 
  • Bereavement of a close relative
  • Technical issues at the time of filing
  • Service issues with HMRC online services
  • A case of a fire, flood or theft prevented you from paying your taxes

A common reason for late filing is an accountant or tax adviser not filing on your behalf. This may also count as a reasonable excuse.

Read more about late tax return penalties here.

What if you can’t afford to pay your taxes?

Do you go to jail for not paying taxes if you just can’t afford to pay? Hmm. 🤔

Ok, last time (promise)…

Each situation is assessed differently. 😅

But first things first, if you can’t afford to pay your taxes on time, you should let HMRC know as soon as possible. Don’t just ignore the situation as this will only result in raking up more fees and penalties on top of your tax bill.

HMRC will assess your case and you may be able to set up a payment plan. This is called a ‘time to pay’ arrangement. This is entirely HMRC’s choice, so they can decline this option and ask for an upfront payment.

If you’re unable to make monthly payments, you’ll be asked to settle your debt with any savings or assets you have.

And in terms of being sent to jail for not being able to pay – well, in extreme cases this can very much happen. So let’s say you’re already in hot water with HMRC for tax fraud, and you’ve been ordered to pay back what you owe, and you fail to pay. Then yes, you could be jailed.

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