Future tax demand

vigman

Hi

Hope this is in the right section? One of my F-I-L's self employed carers has apparently had a tax demand dated up to July this year (6 months into the future).

Is this normal practice? It did not happen when I was self emplyed for 20+ years, we always paid in arrears.

Also as her hours are not regular, how could the tax office come up with a future tax estimate?

Any help, advice welcomed, please?

TIA

Vigman

phantom9999

Hi - from HMRC website, hope this helps
What you pay and when you pay it

Your tax bill won't always match the amount you calculated on your Self Assessment return. That's because sometimes you'll owe 'balancing payments' for the previous year or 'payments on account' for the current year.
Balancing payments

You may have to pay a 'balancing payment' for the previous tax year. This includes any tax you owe and any interest due on late payments and penalties. The balancing payment takes account of any payments you've already made. You'll have to make the balancing payment by 31 January after the end of the tax year.
For example, for the tax year 2008-09 (6 April 2008 to 5 April 2009) the balancing payment will be due on 31 January 2010.
Payments on account

You'll usually have to make 'payments on account' of the current year's tax. You'll have to make two payments, one by 31 January in the current year and the other by the following 31 July. Each payment is half of the tax due for the previous year.
For example, for the tax year 2009-10 (6 April 2009 to 5 April 2010) the first payment on account will be due on 31 January 2010. The second payment on account will be due on 31 July 2010.
You'll have to make payments on account if your previous year's tax was over £500 for 2007-08 and earlier tax years or £1,000 for 2008-09 onwards - unless more than 80 per cent of the previous year's liability was covered by tax taken off at source.
For example, if your liability is under £1,000 in 2008-09 you will not have to make payments on account on 31 January and 31 July 2010 towards your 2009-10 liability, but will instead make a single payment on 31 January 2011.
If you think your payments on account are too high

If you know that your income for the current year will be lower than last year's you can ask to reduce your payments on account. But:

• you'll have to pay interest on any extra tax that we later find was due
• you might have to pay a penalty if you ask to reduce the payments without taking proper care

You can reduce your payments on account on your tax return and explain in the 'Additional Information' section why you have. You can also use form SA303 to claim to reduce your payments or to change your earlier claim.
If you realise that you've reduced your payments by too much - perhaps because your income turns out to be higher than you thought - please tell us straight away. You can use form SA303 or ring us on the phone number on your Self Assessment statement. If you delay you may have to pay interest, surcharges or a penalty.