When do I have to pay by?

Caroline73_2

Probably a very easy question....

I am SE and employed, it's my 3rd year doing both. In 06/07 and 07/08 I made a small loss and by doing my SA got a tax rebate.

Just tallying up my figures for 08/09 and I look to have a made a nice profit :j :j . My tax free allowance is taken up in my employment so I know I will have to pay 20% of my profit.

Assuming I submit my return ASAP, probably May when I get my P60, when will I have to pay it by?

Thanks!

System

31st January 2010

Mikeyorks

31st Jan 2010.

But ..... bear in mind that if your profit is over £500 and your SA accounts for more than 20% of your combined income .... you will also have to pay 50% (of your 08-09 liability) as a payment on account of 09-10. And a further 50% the 31st July 2010.

http://www.hmrc.gov.uk/sa/understand-statement.htm

Caroline73_2

Mikeyorks wrote: »

31st Jan 2010.

But ..... bear in mind that if your profit is over £500 and your SA accounts for more than 20% of your combined income .... you will also have to pay 50% (of your 08-09 liability) as a payment on account of 09-10. And a further 50% the 31st July 2010.

ok, that is the case, if you mean my SE profit is more than 20% of combined income. Works out about 35% SE and 65% employed.

So if I have to pay £1000 tax from SE, I have to do that by Jan 2010, along with £500 because of 08/09 liabilty and £500 in July 10.

TIA

Mikeyorks

Caroline73 wrote: »

So if I have to pay £1000 tax from SE, I have to do that by Jan 2010, along with £500 because of 08/09 liabilty and £500 in July 10.

TIA

Looks right - but, just to clarify :-

• £1000 on 31.1.10 for 08-09 plus £500, on the same date, on account of your 09-10 liability.
• So that's £1500 in total ... followed by a further £500 on 31.7.10.

Therefore at 31.1.11 ......... you will have paid your 09-10 liability, but subject to any balancing payment if your 09-10 profit is better than 08-09? But at 31.1.11 you have to pay 50% of your 09-10 liability ..... on account of 10-11. And so it goes on .........

ceeforcat

'But ..... bear in mind that if your profit is over £500'

Think this should read - 'tax bill over £500'

tyllwyd

I'm never quite sure what the best thing to do so I'm asking this as a question ... in the OP's situation, she knows she will have money to pay in January 2010 but at the moment she is not making any balancing payments. If she files her return before July 2009, will HMRC ask her for any money at balancing payment time in July 2009? So my question is, would it be better to wait until autumn before filing the return?

ceeforcat

tyllwyd wrote: »

I'm never quite sure what the best thing to do so I'm asking this as a question ... in the OP's situation, she knows she will have money to pay in January 2010 but at the moment she is not making any balancing payments. If she files her return before July 2009, will HMRC ask her for any money at balancing payment time in July 2009? So my question is, would it be better to wait until autumn before filing the return?

Think you are a little confused here - the first payment is due on 31/01/10 - the balancing payment for 2008/09 - together with first payment on account for 2009/10. There is no payment due in July 2009. When the return is filed (as long as it is beore 31/01/10) is irrelevant.

tyllwyd

ceeforcat wrote: »

Think you are a little confused here - the first payment is due on 31/01/10 - the balancing payment for 2008/09 - together with first payment on account for 2009/10. There is no payment due in July 2009. When the return is filed (as long as it is beore 31/01/10) is irrelevant.

Whoops, sorry you are right - I meant payment on account, not balancing payment. What I meant to say was, if she files before July, will she be asked to make a payment on account for 2008/09? (although I think you have answered this 'no')

Similarly, if you are due to make a payment on account, do they ever increase it if you file before July? (I'm pretty sure I've had mine decreased once in the past when my tax due was less than the previous year, so I wondered if they ever go the other way.)

ceeforcat

1) No payments due until 31/01/10

2) The payments on account will always be 50% of the previous years liability. If you owe £2000 for 2008/09 (due Jan 2010) your payments on account will each be £1000 unless:

1) your liability for the previous year was below £500

2) your amount outstanding is less that 20% of your total tax bill for the year including amounts deducted at source.

3) You have good reason to reduce the payments on account (e.g. potentially less profits?)