Paying Tax Monthly

CHRIS---

Hi Folks
Probably not the correct Forum but I didn't see anywhere better to post this question, which is:-
Can I pay tax every month if I want to so that there is less of a shock at the end of the year?
I'm thinking of sending 20% of my income each month to this end but don't know if it's allowed.
Thanks in advance
Chris

Dazed_and_confused

Most people do, it's called PAYE.

If you are referring to Self Assessment then there's nothing to stop you just making regular payments into your Self Assessment account.

Just remember not to claim a repayment each time you file a return as otherwise anything on your account not needed at that point would be refunded.

You could also Google Self Assessment budget payment plan.

custardy

Why not tuck the 20% away in an account of your own?
Gives you flexibility through the year if funds are required.

CHRIS---

custardy wrote: »

Why not tuck the 20% away in an account of your own?
Gives you flexibility through the year if funds are required.

Yes I did think of that but savings rates are so chronic I thought paying it straight to HMRC might just be easier lol

uknick

How can paying it to HMRC at nil % return be worse than getting, say 0.05% (cited for extreme case), on your money. Even £1 is better than £0.

unholyangel

uknick wrote: »

How can paying it to HMRC at nil % return be worse than getting, say 0.05% (cited for extreme case), on your money. Even £1 is better than £0.

You are most definitely correct the OP can get a better deal elsewhere, but HMRC do actually pay interest. Its just set at a paltry 0.5% (for income tax - it can vary depending on the type of tax) and has some special conditions attached. If you work for HMRC (I think you do anyway, apologies if I've mixed you up with someone else), you might recognise it as a repayment supplement.

https://www.gov.uk/hmrc-internal-manuals/self-assessment-legal-framework/salf302
https://www.gov.uk/hmrc-internal-manuals/self-assessment-legal-framework/salf306

OP would be better off even splitting it over several accounts - perhaps those who offer a high rate of interest on the first £x of the balance. Like nationwide offer 5% on first £2500. TSB offer 3% on the first £1500 etc. That way they get a better interest rate and have the funds available, should they require them.

CHRIS---

Thanks for the detailed replies guys.
I shall consider my options. I might even buys some premium bonds with the money and hope to get lucky :-)

CHRIS---

Nobody saves harder or looks after there finances tighter than me mate, but it gets to the point where a quid here or a quid there just isn't worth the effort.

kuratowski

CHRIS--- wrote: »

Nobody saves harder or looks after there finances tighter than me mate, but it gets to the point where a quid here or a quid there just isn't worth the effort.

Heresy! You can't say that on MSE :rotfl:

CHRIS---

Yes I have found this.
I decided to buy Premium Bonds every month just for the hell of it and then cash them in to pay my tax bill when required.
It might not be the most efficient way of doing things but you never know I might hit a big win.

Dazed_and_confused

Just don't forget to cash them in after the start of January draw