How far "ahead of myself" should I be re saving for income tax?

Bill01

I am self-employed and have a fairly regular income. I put money aside with which to pay my income tax bills in January and June (35%). My question is: how far ahead of the game should I be? when I pay my tax bill in Jan should I have already saved half of what I will need to pay the June bill? My wife strongly feels that I should have enough saved so that I would be able to pay the tax on everything I have earned if I suddenly decided to/ had to stop work tomorrow (this isn't likely to happen, but anything is possible). My view is that as long as I have enough in the bank to be able to pay the tax when it is due then I am in fact saving the right amount, but she feels that means I have "slipped" 3 months.
Any thoughts?

CLAPTON

why wouldn't you have saved enough to pay the current amount due to date (i.e. assuming you stopped working shortly)

if you don't you then have to save a lot in a short time when you may have no income; in your wife is rich and can afford to pay your tax bill then problem of course)

jamesml

Personally I would be setting aside % of my income as and when I received it into a separate account, and once you've got into the swing of making payments this should just trickle in month on month and the get swindled each june and jan as you pay up.

jennifernil

By the time you made your second POA in June 2013, which is for the tax year 2012/13, you will already have had income in April, May and June of the TY 2013/14, so yes, you should have 3 months in hand at that point.

Listen to your wife!

suso

Have the rules changed, I thought payments on account were Jan 31st and July 31st or have I missed something ?

jennifernil

No, you are of course correct!

OP, that means you really need to have 4 months in hand come end of July.