Not tax cutting but tax problem

bommy

Just something to make people on here aware that if you opt out of making an advance payment on account with your income tax that you will get charged an interest payment

My daughter is self employed - did her tax return on time just after April 5th and paid within a few days.
It wasnt applied to her account as they tax office said they hadnt received it.
After numerous phone calls it has now been paid on her account but she had a letter telling her that she has to pay and interest charge of £10 because she didnt pay in advance in January this year.
Apparently you can opt out of making advance payments but will get charged interest but they dont tell you that.

trevormax

bommy wrote: »

Apparently you can opt out of making advance payments but will get charged interest but they dont tell you that.

They do tell you this on the SA online site I believe. When you ask to reduce your payments on account, I think it says something along the lines of "If you reduce the payment and it is reduced too much, you will be charged interest on the shortfall".

It also says on the claim form you fill in to reduce your payments on account just above the signnature box - http://www.hmrc.gov.uk/sa/forms/sa303.pdf

You should only reduce your payments on account if you know you are not going to make as much money this year.

Tarasam

bommy wrote: »

Apparently you can opt out of making advance payments but will get charged interest but they dont tell you that.

I'm sorry but you do get told that. If you reduce them by phone we are required to make you aware of that, also the letter that gets sent out after the claim to reduce has been applied to the record contains that very information. Also as Trevor correctly states its on the website.
If you paid anything else late for any other establishment you would be fined and have interest applied so why is this any different, plus the tax she would be paying now is infact in relation to a tax year which, had she been a PAYE employee, she would have paid during that tax year so shes already getting the benefit of paying her tax later than it should have been paid.