Warning on tax arrears

Thursday 6th October 2005, 12:00AM BST.

ANYONE with income tax arrears is being urged to settle up by the end of the year or face up to a 35 per cent deduction from their monthly salary from January.

Once the new ITIS system starts at the beginning of next year, all employees will have their income tax deducted on a monthly basis to pay the previous year’s bill.

People will still be expected to fill in their tax return forms as usual, but will have the amount automatically taken from them on a monthly basis instead of paying a one-off lump sum in December.

They can expect to have around ten per cent of their monthly pay packet taken away.

The level of their percentage deduction is called an effective rate.

High rates But those who have tax arrears are being warned to do everything they can to clear their debt before the end of the year – otherwise their debt will be added to their tax bill and automatically taken from their wages.

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