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Reply to: Tax On Account
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Previously on "Tax On Account"
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Guest repliedThanks for the response
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Guest repliedWrite to the IR and tell them you expect your income in that years to be 4p or whatever. i.e. you appeal the payment on account back to nil.
If it turns out you were a higher rate taxpayer and should have made a payment on account then they are entitled to charge you interest.
The payment on account you make for year 2 is half your liability on year 1. Also if you look at the dates involved it is not generally a payment in advance as such because you will have had the income. i.e. you send in your tax return now, the higher rate tax from your dividends in the year to Apr 05 is not payable until Jan 06, at which time the payment on account for y/e Apr 06 falls due.
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Guest started a topic Tax On AccountTax On Account
Question,
I'm currently working through a composite, being paid salary and dividend, I've worked under this composite for a year since April 04. I'm about to put my first tax return in for Apr 04 to Apr 05, by my calculations I will have to pay £9k tax on the dividends recieved for this period.
Now I've been told that if you go over a certain limit in terms of the amount of tax you owe at self-assessment, they will ask you to pay the same amount of tax, in advance for the period Apr 05 - Apr 06 (pay some in Jun 05 and rest Jan 06 I think) as they will assume you will be recieving the income again that period.
I've decided that I now want to move from the composite to a standard umberalla and give the IR what they want as if I fail IR35 (because I do). What evidence will I need to provide to the IR to show them I wont be recieving the dividend income in tax year Apr 05 to Apr 06 ? I don't want to end up paying the IR tax on account and then having to claim it back at the end of the year. Basically I cannot afford to pay the tax on account if and wait till the end of the year, if I tax in the ar*e and give the IR 41p in every £1 I earn.Tags: None
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