Making payments on account for the first time When you make payments on account for the first time, it might be your first year of trading or the first time your tax bill has been over £1,000 in a tax year. Either way, it’s important to know what to expect. Lets say you began trading in 2013/14 and have a tax bill of £1,400 for that year, and you didnt have any tax deducted at source. That tax bill would be due for payment on 31st January 2015. However, because your tax bill is over £1,000, you’d also have to make your first payment on account (£700, half the prior year’s tax bill) for 2013/14 by 31st January 2015 - in addition to your tax bill. This means that you’d owe £2,100 to HMRC on 31st January 2015 - ouch!. This can come as an unpleasant surprise, and it’s one reason why its a good idea to do your tax return as early as possible - so you have time to put money aside! *Income tax ‘paid at source’ is deducted from your income before you receive it (e.g. when tax is deducted from your salary under PAYE).
Posted on: Sun, 25 Jan 2015 09:01:00 +0000
Trending Topics
Recently Viewed Topics
© 2015