Can I save tax bill money?

greenlightluke

Hi,
so I start new employment in April and because they are Jersey based it means I need to fill in self-assessment annually. 

I intend to remove the tax I would pay and place it in a separate account but can I place this money in a savings account and withdraw at the end of the year? Are their laws prohibiting this?

self assessment is new to me and I’ve had a look on the Gov website but could not find anything. 

oldbikebloke

does not matter where you keep the money set aside to pay the tax (as long as it is not in some dodgy offshore account set up that you need to notify to HMRC or risk being investigated for tax evasion)

- cash under the bed
- current account
- savings account 
all are valid places to hold money before you spend it on settling your tax 

obviously if in an interest earning account you will be earning interest which will be declared on the next year's tax return so you'll pay a bit of tax on that interest , Overall though its a lot more sensible to set aside enough money to pay the tax and let yourself benefit from that by earning some interest in the meantime

compare that to being PAYE employee, your tax is deducted before you even get the cash, so no chance to make money on the money before you pay it over to settle your tax 

greenlightluke

oldbikebloke said:

does not matter where you keep the money set aside to pay the tax (as long as it is not in some dodgy offshore account set up that you need to notify to HMRC or risk being investigated for tax evasion)

- cash under the bed
- current account
- savings account 
all are valid places to hold money before you spend it on settling your tax 

obviously if in an interest earning account you will be earning interest which will be declared on the next year's tax return so you'll pay a bit of tax on that interest , Overall though its a lot more sensible to set aside enough money to pay the tax and let yourself benefit from that by earning some interest in the meantime

compare that to being PAYE employee, your tax is deducted before you even get the cash, so no chance to make money on the money before you pay it over to settle your tax 

Thank you for such a timely response. 

I assumed it would be okay, but you know what they say about assumptions. Made sense if I’m going to put away tax I may as well make it work for me. 

Thank you once again!