Reducing Payment on Account and tax form help

idf2011

Hi,

Hopefully someone will be able to help me. I am getting a little confused on my January 2012 tax return and payment on account amounts already made.

I am filling out my tax return

My Earning for 2010-2011 were £34,041 with a profit of £33,066

In January 2011 I paid on account £1462.97 and also the same in July 2011 - totalling £2925.94

After filling in the form it says that that the tax due for the year is £9,135.53. Am I right in thinking that the amounts I paid in January and July will be deducted from this total? Leaving me a balance of £6209.06 to be paid before January 31 2012.

My next question is that I stopped working as self employed in June this year and am now working full time employed with tax taken at source. Therefore I would like to reduce the payment on account for January 2012 as I know that my earnings while self employed are a lot less this year than they were in 2010-11.

For April 2011 till June 2011 I earned £16,326 with a profit of £16,109 after that point I stopped all self employed work. But I am confused on how I work out what to reduce my January payment on account to? They are asking for £3,755 but i guess this figure is based on the same earnings as the previous year. As what I actually earned while self employed is nearly exactly half of what I earned in 2010-2011 can I just half this amount?

I hope this makes senses I did call the tax office but they said they couldn't talk numbers just principles.

Any help would be greatly appreciated.

ceeforcat

The tax due is about £7510 for 2010/2011 - hence the payments on account for 2011/2012 of £3755 each. From this you must deduct your payments on account already made (2 by £1462.97) as you state leaving a balance payable for 2010/11 of £4584.06. I cannot fathom the figure of £9135.53 (but it is roughly twice the outstanding balance which is odd).

To answer the part regarding the tax due for 2011/12 and reducing your POA we need to know what your employment/earnings are from June 2011 to April 2012.

idf2011

Hi Ceeforcat thank you for taking the time to answer,

When I said tax in my question I should have said tax, national insurance and student loan, sorry. When I deduct the student loan. I get the figure you quoted.

Income tax charged - £5329
plus class 4 national insurance contributions £2188
plus student loan contributions £1625
Income tax and class 4 national insurance £9142
minus tax deducted £6.75

Income tax and class 4 BI Due £9,135.53

On to part 2 - I started work in July 2011 earning £27,500 pa. Paying 386.20 per month tax and 195.28 NI per month

Thanks again

ceeforcat

Tax looks high - what is your tax code? Is there also a w1 or M 1 after it.

idf2011

Tax code on my payslip is 357T

ceeforcat

Well you must have a company car or some other benefit as the 'normal' code is 747L. Anyway 357T gives you personal allowances of 3575 per year. To be safe, I would estimate the tax due on your self employment at £16000 @ 20% = £3200.00 plus Class IV NIC of about £800. You would need to reduce your payments on account to £2000.00 each to be safe (I reckon the tax due on your SE will be about £3810.00). The total due on 31st January 2012 is £8209.06 and a further £2000 due on 31st July 2012.

Really need to check out that PAYE code though.

idf2011

no additional benefits like that, so I best contact my HR department and get them to check it. Thank you very much for your help :beer: