Are you paying too much tax on 31 January 2013?
Whilst the 31 January tax payment due for most taxpayers will be the final payment on account for 2011/2012, it will also include an estimate for 2012/2013.
Tax payers, under Self Assessment, normally make two payments a year to HM Revenue & Customs. The first is on 31 January and the second is on 31 July. These payments are based on an estimate according to the previous years Tax and National Insurance liability.
As the two payments are estimated, if these estimates are too low, a balancing payment will be due on the following 31 January.
However, if a taxpayer has a worse year than their previous year, these estimated payments on account may be too high. Leaving the submission of your tax return to the last minute will perhaps give you a tax refund, but only because you’ve paid too much in the first place.
Certainly, if you’ve experienced a worse trading year, cash flow will be adversely affected.
If you think you’ve paid too much tax, contact me for some free advice. It may be possible to make a reduction in your payments on account using a very simple form.
Beware though; reducing your payments on account too low will mean that you’ve not paid enough and HMRC will charge interest from the due dates to the date the you catch up with your tax.
About me: I’m a fully qualified accountant (FCCA) with over 16 years experience in giving tax advice to the self employed. I have trained at a top 100 accountancy practice based in Essex and experienced a wide variety clients across many business sectors and income levels. Now running my own business I see the benefit of offering friendly free advice. Whilst I offered great advice during employment, I found that having a charge out rate, clients would either save up several questions for one phone call or not call altogether, worried that each call would cost too much to ask a simple question. Taking down this barrier, my clients call and email me with confidence that they won’t be charged extra. My fees are agreed up front on a fixed price basis tailored to each clients business.
Changing accountant and tax adviser is simpler than you’d expect. Contact me to see what I mean on 07944 110705.