Self assesment help please

[funkymunkey]

Hiya I'm a bit confused and would really appreciate any help.

In January 2010 I paid a payment split into a balancing payment for the tax year ending April 2009, and a first payment for the tax year ending April 2010. The tax I have just paid is the second payment for the tax year ending April 2010. I still owe a balancing payment for the tax year ending April 2010 due in a month.

I have earned quite a bit less in the tax year ending April 2010 than I did in the tax year ending April 2009. Is there any way I can reduce the payments for the tax year ending April 2010 before filing the self-assesment in January 2011, or when I file the assesment will it take into account the fact that I have already paid more than I should for the year?

Also, will I just get charged interest at 3% if I don't pay the balancing payment for the balancing payment, or are there any other nasty surprises lurking?

Cheers in advance.

[oafc0000]

Can I suggest seeking advice on internet forums for anything tax related is unwise... Phone an accountant...

That said, we do have a resident trainee accountant on here I think...

[funkymunkey]

It's ok, I found it elsewhere. Basically When I file my return in January the actual amount for the year will be caluclated, rather than the projected amount from last year's figures. As it will be less, I will have overpaid, and either get a rebate, or it will go towards next year's tax. Just got to find some money now...

[Gre]

That said, we do have a resident trainee accountant on here I think...

[funkymunkey]

Cheers Gre. It makes sense really.

[feral chile]

You can also claim to reduce your payments on account, but you have to work out what your liability will be, as the adviser isn't allowed to do it for you, and you have to be careful not to underestimate it, as if your liability is higher when the return comes in, the payments on account will be reinstated to cover the rate of liability, and interest will accrue on the unpaid amount.

You can do this online, by phone or in writing, but I'd recommend the first 2 options as your claim will be dealt with much quicker, and if you haven't registered to file online that can take a while to set up too.

Edited June 29, 2010 by feral chile

[Alcatraz]

I thought Tax didn't have to be taxing? I have a lot to learn

[Haggis]

Sorry missed this. Work in tax, so could answer this, but feral chile is right, you can ask to reduce the payments on account if your liability is going to be lower in 2009/10.

The payments on account you are asked for in January & July are based on the 2008/09 liability and are just a guess. So you are perfectly entitled to make the claim to reduce, but as feral says...reduce too far and they will back date payments and charge interest.

Gre is also correct. The best way of making sure that the payment due is absolutely correct is do complete your tax return early. As someone who has to complete 100s in January, I'd love it if my clients took this advice.

Feel free to pm me if you like

[Haggis]

Sorry missed this. Work in tax, so could answer this, but feral chile is right, you can ask to reduce the payments on account if your liability is going to be lower in 2009/10.

The payments on account you are asked for in January & July are based on the 2008/09 liability and are just a guess. So you are perfectly entitled to make the claim to reduce, but as feral says...reduce too far and they will back date payments and charge interest.

Gre is also correct. The best way of making sure that the payment due is absolutely correct is do complete your tax return early. As someone who has to complete 100s in January, I'd love it if my clients took this advice.

Feel free to pm me if you like

[feral chile]

I'd advise reducing your payments on account in case there's a delay processing your return. Until your return is processed the payments on account will still show as due. Of course, this will all get sorted when the return's finally processed, but in the meantime you'd get annoying statements showing the original payments on account, and maybe reminder letters etc.

[feral chile]

Hiya I'm a bit confused and would really appreciate any help.

In January 2010 I paid a payment split into a balancing payment for the tax year ending April 2009, and a first payment for the tax year ending April 2010. The tax I have just paid is the second payment for the tax year ending April 2010. I still owe a balancing payment for the tax year ending April 2010 due in a month.

I have earned quite a bit less in the tax year ending April 2010 than I did in the tax year ending April 2009. Is there any way I can reduce the payments for the tax year ending April 2010 before filing the self-assesment in January 2011, or when I file the assesment will it take into account the fact that I have already paid more than I should for the year?

Also, will I just get charged interest at 3% if I don't pay the balancing payment for the balancing payment, or are there any other nasty surprises lurking?

Cheers in advance.

[funkymunkey]

Bit confused by this bit. There's one payment on account due in January, the second due in July, then if you owed anything else, the 2009/2010 balancing payment would be due 31 January 2011.

The payments on account are based on the previous years's liability, so in your case, if you have earned less this year, and paid both payments on account, you'd get a repayment once the return's processed.

As others have said, you can file your return early and HMRC will recalculate your liability, but there might be a delay in processing your return.

[funkymunkey]

Sorry missed this. Work in tax, so could answer this, but feral chile is right, you can ask to reduce the payments on account if your liability is going to be lower in 2009/10.

The payments on account you are asked for in January & July are based on the 2008/09 liability and are just a guess. So you are perfectly entitled to make the claim to reduce, but as feral says...reduce too far and they will back date payments and charge interest.

Gre is also correct. The best way of making sure that the payment due is absolutely correct is do complete your tax return early. As someone who has to complete 100s in January, I'd love it if my clients took this advice.

Feel free to pm me if you like

[funkymunkey]

Bit confused by this bit. There's one payment on account due in January, the second due in July, then if you owed anything else, the 2009/2010 balancing payment would be due 31 January 2011.

The payments on account are based on the previous years's liability, so in your case, if you have earned less this year, and paid both payments on account, you'd get a repayment once the return's processed.

As others have said, you can file your return early and HMRC will recalculate your liability, but there might be a delay in processing your return.

[funkymunkey]

going through it, I think I'd best just get my return done asap.