Employed to LLP to Employed & tax payment

Semantic

Hi all,

I was wondering if someone could help me with my tax queries as the hmrc line has been a bit vague..

I was in employment until the end of May last year earning a decent amount, then left to be a partner at an LLP in August (took a break in the interim). Things didn't work out and I received a sizeable payment (£80k) despite being a member for only a month in return for resigning.

As I resigned I was ineligible for unemployment (I believe) so didn't apply and eventually found another job at the start of January this year, back to full-time employment (PAYE), eating through the tax I should have put to one side to support my family in the interim.

Now I'm filing for self-assessment and looking at my finances I think I should be able to pay the tax I owe from the LLP at the end of March next year as I have a blob of cash coming then.

From what I understand, my full tax amount from the LLP will be owed at the end of Jan 2012, which is also the filing deadline for online forms. The penalty for a delay in payment is 5% of the amount after thirty days (end Feb) and another 5% if its six months late + interest at 3% pa.

Here are my queries:

1. If I file on the 30th Jan 2012, ie within the filing time, how can I pay by 31st Jan given I won't have received the number for how much tax I owe? Or do I receive 30 days from when the bill comes back? Seems strange.

2. How reasonable are HMRC in doing payment plans/at what rates? I should be able to pay the full amount I owe by end March, but in a bad case scenario (worst case being I get fired!) it might be 2/3rds then and the final third by end June.

Thanks for your help, very strange year.

ceeforcat

1. If I file on the 30th Jan 2012, ie within the filing time, how can I pay by 31st Jan given I won't have received the number for how much tax I owe? Or do I receive 30 days from when the bill comes back? Seems strange.

The amount due will available to view on your calculation when filing online together with details of how to pay. The deadline for paper filing is 31st October - not 31st January.

Should be fine if all cleared by 31st March but there will be interest. There is also a 5% surcharge on the amount outstanding at 28th February which is added to your liability.

John_Pierpoint

You have 6 months to try and save up to pay off this debt to the tax man.
Does your partner have any savings?

This is more a question for the "debt free wannabe board".

[The Bristol and West building society (shares RIP?) did a survey of their repossessions back in the 1990 recession.
One would have expected death, debt, divorce and unemployment amongst working class borrowers to be the major source of their losses - What they actually found was professional people who were over optimistic and bad money managers during a down turn].

tyllwyd

About filing online - if you haven't done it before, you need to get everything set up in good time. You need to register to use the self-assessment service, and it can take a week or two to get the password. My advice is to get everything set up before Christmas, and put in all the information into the form online - it does a calculation so you can get an idea of how much you will owe, but it doesn't actually file the return until you hit the button and submit it to HMRC.

TBH I don't know what the advantage is of waiting until 31 Jan to submit the form - the payment is due on 31 Jan anyway, so I try to do my return a couple of weeks beforehand to give me time to make the payment and check that everything is OK for 31 January.