Self Assessment - reduce 'payment on account'

chubsta

Feel free to go right to the bottom of this post to get to the meat of my problem, but here is the background!

I am both employed and pay tax/NI via PAYE and also self-employed, i have a small business 'on the side' which does quite well. i have just finished my 2nd year of operating the business, and it has been a good year. I did a self assessment last year for the self-employed stuff for 2010-2011, all paid up to date, so thats ok.

I have just completed, but not submitted, a self-assessment for 2011-2012 and because my tax owed is so much they also want me to make a 'payment on account' equal to this years tax bill, which is effectively doubling the amount of tax i have to give them! Now, i have read everything and understand what is going on, thats not the problem, although it was a nasty surprise.

The problem i have is that my self-employed business is very steady and predictable in terms of income, and this year i have decided that i will cut it back considerably, and therefor won't earn as much, and therefore won't be liable for so much tax as 2011-2012. So i will be paying far more 'on account' that i will be liable for, and it will be a big chunk of my income and therefore hard to find! So, i want to reduce the amount payed 'on account' to a more realistic level for this year, and am aware of the risks of reducing it too far.

Now to the problem - i cannot find anywhere on the online self-assessment form where my adjusted figure can be entered - i spoke to someone at HMRC who said that it can be done on the form, but they don't know how and would arrange a call back, which is no good to me as with 2 jobs i am never at home during the day to sit in front of my computer waiting for them to call!

So, afetr all that waffle, in short, does anyone know where on the Self Assessment online form i can apply for a reduction in the payments on account for 2012-2013?

Cheers for any advice!

Xutl

Here: hmrc.gov.uk/demo/individual/self-assessment/case-studies/simple-business/page226.html

chubsta

Thanks for the reply - thing is, i don't get that page! I get the page before - 'if you have not paid enough tax', and then it goes straight to the page after the one you linked to - 'adjustments to tax due', there is no 'payments on account' page - weird...

Xutl

Very - well if all else fails you could always go old school and fill in an SA303?

hmrc.gov.uk/sa/forms/sa303.pdf

ceeforcat

I have read your poat a couple of times and am a little confused. You say that you have completed a return for 2011/12 and have not yet submitted it and, presumably, you now know your tax liability for that year. The payments on account for 2011/12 are made in January 2012 and July 2012 and it is sensible to reduce these each to half of your known liability (always giving yourself a little leeway - do not reduce to below your final liability).

However you go on to talk about 2012/13 payments on account. They will each be half of your 2011/12 tax liability and, upon submission of 2011/12 return, there is an option near the end where you can reduce the payments on account for 2012/13.

Does this help? Are we both talking about the same tax years?

jcorbygas

I submitted one of my customers (husband) self employed self assessment yesterday online, and right at the end of the form, after it comes up with figures due for tax and ni, and after a bit regarding underpaid tax, there is then a section for payments on account.
I needed to reduce his payment on account and it asks you to put a figure in and explain why you are making a claim.
I successfully did this and submitted the SA and on checking the tax position for the next year it now shows the reduced amount owing.

Jackie

chrismac1

Can you manage this?

1. Log in to your self-assessment account on the HMRC website.
2. Find the menu option "reduce payments on account."

Fill in the boxes. If based on a forecast, put in amounts a little higher than your forecast expects you to end up paying.

Mikeyorks

chrismac1 wrote: »

Can you manage this?

1. Log in to your self-assessment account on the HMRC website.
2. Find the menu option "reduce payments on account."
.

Perhaps actually read post #3?

xylophone

http://www.hmrc.gov.uk/sa/forms/sa303.pdf
The form is here.

chocolatebar2009

Hy
i quite liked your reply as you seem knowledgeable
I am a self employed craft worker of about less than 15k a year earnings, but last year has been poor and wont earn very much profit to survive?
I have had to start a part time 15hr job filling shelves, do you know what Tax/NI I will have to pay and how I fill in the tax forms, codes etc. I started this week, many thanks

chocolatebar2009

Hy
If anyone can help me id be very gratefull
I am a self employed craft worker of about less than 15k a year earnings, but last year has been poor and wont earn very much profit to survive?
I have had to start a part time 15hr job filling shelves, do you know what Tax/NI I will have to pay and how I fill in the tax forms, codes etc. I started this week, many thanks