I seem to have a Business Tax Account

witzzzend

I seem to have a Business Tax Account.

 I don't know why, or when this happened.

 I do know that I have never owned or run a business in my life.

 I don't know whether this is to my advantage or disadvantage

Fiscal drag means that in FY 2024/25 I will be paying tax at 40% for the first time . My income  is based upon State Pen, Occupational Pen and savings interest of  more than £10k.

I noticed that when paying for tax owed for 23/24 I was told to pay 50% extra by Jan 31 2025 for tax in advance for 2024/25.

Is this usual for a pensioner who has been using self-assessment for many years without, I believe, previously making future payments on account.

eskbanker

It won't be anything to do with being a pensioner or having a business tax account, but simply a reflection of how much tax you owe - once the underpayment reaches a threshold (£1K I think), you are required to make payments on account rather than waiting until the following January.  If you've recently gone into higher rate tax and have over £10K in savings interest then there will presumably be a four-figure tax payment needed....

https://www.gov.uk/understand-self-assessment-bill/payments-on-account

Nomunnofun1

witzzzend said:

I seem to have a Business Tax Account.

 I don't know why, or when this happened.

 I do know that I have never owned or run a business in my life.

 I don't know whether this is to my advantage or disadvantage

Fiscal drag means that in FY 2024/25 I will be paying tax at 40% for the first time . My income  is based upon State Pen, Occupational Pen and savings interest of  more than £10k.

I noticed that when paying for tax owed for 23/24 I was told to pay 50% extra by Jan 31 2025 for tax in advance for 2024/25.

Is this usual for a pensioner who has been using self-assessment for many years without, I believe, previously making future payments on account.

Nope - not a business account - you have simply gone over the £1000 underpaid threshold whereby you now have to make two payments on account of 2024/25 in January and July. 

Note these are not advance payments (2024/25 commenced nearly ten months ago) and will be set against your final liability for that year. 

witzzzend

Thanks for the explanation of why I am paying on account for the current tax year.

I still don't understand why I appear to be a business tax account holder. Are all self-assessment users underpaying  more than £1000 given the "business" status?

Nomunnofun1

witzzzend said:

Thanks for the explanation of why I am paying on account for the current tax year.

I still don't understand why I appear to be a business tax account holder. Are all self-assessment users underpaying  more than £1000 given the "business" status?

As before - you don’t have a ‘business account’. 

On the second point the answer is ‘Yes’ unless  80% or more of your total tax liability for the year has been collected through PAYE. 

https://www.gov.uk/understand-self-assessment-bill/payments-on-account

These rules have not changed since self-assessment was introduced 28 years ago!

sheramber

Where do you  see that you have been given 'business status?

Self assessment applies to more than self employed traders.

Many PAYE taxpayer come under self assessment.