cannot understand recent tax bill

sunny2_2

I have an accountant & he seems to be doing absolutely nothing to help me last year i gave him my accounts & i had to pay £995 tax but this year i gave all my details & havent made a lot more this year so was expecting pretty much the same thing i went in to the office to be hit with a £4,300 bill to pay a further £2,150 in July & i just dont have the funds to pay it. I was really shocked as have been running my business 6 years & have pretty much spent & sold the same amounts ever year so i cant understand why the sudden increase & my account is not explaining anything ive just been told bill needs to be paid by Monday !
The break down shows that i made £16,000 in the year & drew £8000 for wages im not sure if thats included in the 16k or not does that amount of tax add up or is there somthing i am just not understanding & what is this money i owe in July ?

Is there anyone that can shed any light ?

Thanks in advance

Mikeyorks

Are you certain the £4300 isn't split into £2150 due 31st Jan and £2150 due 31st July?

Those are known as payments on account (of the tax due 31st Jan 2012) ..... and you will always have made them if your tax due in any SA year exceeds £1k? So you should have made payments on account (POAs) in Jan 2010 and July 2010 ........ and those should (if your profits are stable) have covered the tax due 31st Jan 2011. Leaving you only the POAs to make?

CLAPTON

surely you must have some idea of what your turnover was and what your expenses were?
do tell us

sunny2_2

no the account def says i have to pay that 4k on monday & the rest is on accont i have never done this on account as the tax i have paid has never been over £1000 thats why this is such a shock to me its gone from just under a grand to near 6k i just cant get my head round it

sunny2_2

This is the thing clapton i dont i havent a clue ive never known anything its very foolish i know this now i will get the exact figures & put them on here might give a better idea, is there any chance the accountant has got this wrong ?

CLAPTON

what sort of business are you in?

sunny2_2

retail i have a gift shop

Mikeyorks

sunny2 wrote: »

no the account def says i have to pay that 4k on monday & the rest is on accont i have never done this on account as the tax i have paid has never been over £1000 thats why this is such a shock to me its gone from just under a grand to near 6k i just cant get my head round it

Then the figures don't make sense. As it implies you have a balancing payment to make of £2150 for 09-10 ........ and a precisely equal £2150 first payment on account for 10-11.

For that to be right - you have to have made POAs of £2150 during last year .................... and suddenly there's too many £2150s for it to all add up?

You need to pin your accountant into a corner - something is not right.

sunny2_2

without sounding overly thick what is poa ?

Mikeyorks

sunny2 wrote: »

without sounding overly thick what is poa ?

......... explained in post #2?


........ and by HMRC .... but takes a bit more wading through :

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

jimmo

I don't intend any disrespect by this but I really find it difficult to see how somebody who has been in business for 6 years doesn't understand the difference between profits and drawings. Just as an example, and in very simple terms, if your business makes an annual profit of £16,000 and your drawings have been £8,000, the business still has £8,000 of its profit sitting somewhere.
You will be required to pay your tax liability on the profits of £16,000 and you really should be able to do that by making additional drawings from the business.