Self Assesment Tax Liability

[kirk]

Hiya All, I've just had my completed SA back from said accountant. I'm pretty confused in that I have circa. £2.5k in tax to send to the good ol HMRC (£800 on account) - I've asked my accountant of course but anyone any ideas what this is ?

I pay myself NMW, and NICS PAYE Tax on a quarterly basis. No other income, divs quarterly (on 6k last fin year though).

I'm slightly confused

Any sensible ideas as to what it could be?

[Bigbird]

Hard to say without looking at the actual figures on your return.

Does YourCo supply you with a car so that you would have a BIK that is not reflected in your tax code yet?

[kirk]

No, nothing at all like that. Only income is expenses (minimal); mileage to client sites @ HMRC rates. NMW salary and div's

[VectraMan]

Tax on divs presumably, but are you saying £6K is all you paid in divs for the year?

[malvolio]

Tax on divs presumably, but are you saying £6K is all you paid in divs for the year?

To expand that slightly, Hector assumes you will earn the same in divis next year as you did this one (stupid but true), so they bill you for the equivalent amount of tax on account in two halves, in advance. Mostly you can simply pay it, since if you overpay you get the balance back with interest, otherwise come next year you are already mostly paid up (although you do it all again for the following year of course). So treat it as a sunk cost. Over time, you only lose out on the fairly small amount of interest had the money stayed in your own account.

Alternatively you can appeal to have the amount reduced or cancelled altogether. You'll have to write to the tax office explaining why and they will make the decision. But if you are unsure, speak to your accountant.

[Robot]

No, nothing at all like that. Only income is expenses (minimal); mileage to client sites @ HMRC rates. NMW salary and div's

Did you have any other employment income during that year, outwith your limited company? If yes, did you supply your current accountants with a P45 from that employment?

[xoggoth]

Eh????? Billed assuming same divis as last year??? Since when? Never had that happen.

PS Oh, higher rate tax payer thing!. Us engineering sector sorts of advanced age who never find contracts near home and have loads of "resting" gaps and can put lots into pensions rarely intrude much into that region.

PPS Sob

[rawly]

To expand that slightly, Hector assumes you will earn the same in divis next year as you did this one (stupid but true), so they bill you for the equivalent amount of tax on account in two halves, in advance. Mostly you can simply pay it, since if you overpay you get the balance back with interest, otherwise come next year you are already mostly paid up (although you do it all again for the following year of course). So treat it as a sunk cost. Over time, you only lose out on the fairly small amount of interest had the money stayed in your own account.

Alternatively you can appeal to have the amount reduced or cancelled altogether. You'll have to write to the tax office explaining why and they will make the decision. But if you are unsure, speak to your accountant.

Actually, the lost interest you suggest must be microscopic when you also consider if you leave it till January 31st of the following year to pay your return (and what fool would submit it anytime sooner!?) - your actually paying half towards the next Tax year that only has 2 months left to run anyway!

Just my perspective anyway.