Budget payment plan to pay tax?

James129

Hi, I worked as a contractor and hired chartered accountant who oversaw my registration with hmrc and other bits and bobs. He will get in touch with me in April to tell me exactly how much tax and NI I need to pay.

What I wanted to know is it possible for me to sign up online to HMRC self assessment services and use budget payment plan to start making payments? Or will this create a problem when my accountant will file a tax return for me?

I have done bit of search but still wonders what is tax deadline if my accountant files tax return? Is it 31st October 2011 or 31st Jan 2012?

Ta

Mikeyorks

If you aren't in arrears with your tax .... then, yes, you can sign up to a Budget Payment Plan (via Direct Debit). If you have a UTR (Unique Taxpayer Reference) then that's your gateway into SA - but you still need to register for online access. Shouldn't cause contention with your Acct.

But I don't understand why you would want to pay HMRC in advance - as there's no merit in it. They don't add any interest - unless your payments are subsequently refundable, when you may get a modicum of repayment supplement depending on the repayment date.

Unless you expect your tax outstanding to be under the payment in advance threshold (£1000) ..... I would simply put a monthly sum into a Savings account - until your tax is due? Under a £1000 .... some people consider (as we're talking £15 or so in lost interest) that paying HMRC circa £80pm on a payment plan is better than getting a bill for the full amount. In particular if their budgeting is a bit suspicious.

The deadline for 10-11 is 31st Jan 2012 ...... which is both the filing and payment date. But do watch that you may also be required to pay 50% on account of 11-12 on 31.1.12 and 31.7.12 ....... if your liability exceeds £1000 and less than 80% has been deducted at source.

James129

Mikeyorks wrote: »

If you aren't in arrears with your tax .... then, yes, you can sign up to a Budget Payment Plan (via Direct Debit). If you have a UTR (Unique Taxpayer Reference) then that's your gateway into SA - but you still need to register for online access. Shouldn't cause contention with your Acct.

But I don't understand why you would want to pay HMRC in advance - as there's no merit in it. They don't add any interest - unless your payments are subsequently refundable, when you may get a modicum of repayment supplement depending on the repayment date.

Unless you expect your tax outstanding to be under the payment in advance threshold (£1000) ..... I would simply put a monthly sum into a Savings account - until your tax is due? Under a £1000 .... some people consider (as we're talking £15 or so in lost interest) that paying HMRC circa £80pm on a payment plan is better than getting a bill for the full amount. In particular if their budgeting is a bit suspicious.

The deadline for 10-11 is 31st Jan 2012 ...... which is both the filing and payment date. But do watch that you may also be required to pay 50% on account of 11-12 on 31.1.12 and 31.7.12 ....... if your liability exceeds £1000 and less than 80% has been deducted at source.

Thanks, my accountant registered me with HMRC last year in June. I have utr number so thats great.

I estimate my tax will be around £3000. The only reason I want to start paying tax in small chunks now is I am in full time employment now and I can set up a direct debit of £250 or more and by the end of Jan 2012, I'd have almost paid the whole tax.

I'd just feel bad If I had to fork out £3000 in one big lump sum. I know I can put the money in savings account and earn bit of interest but I have set up myself a saving target of £1000 every month and I believe I can still achieve that on top of paying the tax. So its just a piece of mind really.

Mikeyorks

James129 wrote: »

So its just a piece of mind really.

I find that odd.

But you actually reflect the results of a quick and dirty MORI poll HMRC commissioned many years ago when they were contemplating Budget plans. 'Peace of mind' came out amazingly strongly and utterly defeated all my logic!

So - if that suits you I'd get it set up asap. As it takes 5 days - from memory - for the initial DD mandate to be set up.