Help for self-assessment newbie

Bride2010

Hi there

My fiance and I are about to rent a flat - due to adverse credit on my side, they have asked for 5 months rent in advance + 6 weeks deposit.

Although we have enough in our savings, my fiance is self-employed so he decided to quickly do his online self-assessment. Although he took advice and researched online, which informed his decision on how much to save - unfortunately, it seems he missed some key points.

He calculated he would have to pay £2749.20 in tax, which is correct. He has also been paying Class 1 NI contributions via DD.

However, he didn't realise he had to pay Class 4 NI and half of next year's tax in advance. Instead of having to pay £2749.20, he's faced with a bill of £5844.88, with a further £1948 to follow at the end of July 2010.

It breaks down as follows:
Tax: 20% of £13.746 = £2749.20
Class 4 NI: 8% of £14,346 = £1147.68
1st payment 09-10 = £1948.00
Total = £5844.88 with £1948.00 due by 31/7/10

Is there anything at all we can do to spread this out, delay the payment for 2010 or anything at all? Not only will we lose this flat, but it will also possibly stop us from being able to afford our wedding next summer (which we've already paid nearly 3k towards, which would all be lost).

If anyone can help or advise, please get in touch.

Many thanks.

Ste_C

Bride2010 wrote: »

Is there anything at all we can do to spread this out, delay the payment for 2010 or anything at all? Not only will we lose this flat, but it will also possibly stop us from being able to afford our wedding next summer (which we've already paid nearly 3k towards, which would all be lost).

If anyone can help or advise, please get in touch.

Many thanks.

You need to ring the HMRC debt helpline and tell them you won't be able to make these payments and they will help you arrange a payment plan.

0845 302 1435

You absolutely must tell them now though otherwise you will be face late payment surcharges and interest if you just fail to pay.

Oh, and might be worth cutting back on luxuries like weddings and concentrating on essentials like taxes and rent...

Rolo_Tomasi

The payment on account assumed that his income for the current tax year will be the same as it was for 2008-09. If you think income has fallen (and therefore there will be less tax due) you can apply to reduce the payments on account.

Be careful though because if you reduce them by too much then there will be an interest charge (although no penalty) on the amount underpaid.