Personal taxation question

[ASB]

If you do that and it turns out to be incorrect then they get seriously stroppy with you.

But from your original post it sounds like that wont be the case so I think you will be OK.

Usual disclaimer, I am not an accountant etc etc

Previously it only cost you interest, i.e. when the figures were known the original dues dates were still used. I think from next year it can involve a penalty.

[Gonzo]

If you expect your income for the current year to be significantly different from the previous year you can ask for these payments to be adjusted."

If you do that and it turns out to be incorrect then they get seriously stroppy with you.

But from your original post it sounds like that wont be the case so I think you will be OK.

Usual disclaimer, I am not an accountant etc etc

[texto]

Thanks for your reply. I found something on HMRC website and rang them . They will be sending me a cheque. Nice to have some money when you need it!!

From HMRC website

"If you think the requested payments are too high

You'll be asked to make two 'payments on account' for the current tax year if the total tax due in the previous tax year is less than 80 per cent of the tax deducted at source through the PAYE (Pay As You Earn) system and your Self Assessment tax bill for the previous year was over £500 (£1000 from 6 April 2009 - tax year 2009-10). Each payment on account equals one half of the previous year's tax liability.

If you expect your income for the current year to be significantly different from the previous year you can ask for these payments to be adjusted."

[Gonzo]

In 2006-2007 tax return, my tax bill was £3000. So Inland revenue asked for £3000 + two installments of £1500 in advance i.e. 6000 in total. Now in my 2007-2008 tax return, my tax bill is £400. So I think they will ask for £400 + two instalments of £200 in advance.

But I've already paid £3000 in advance.What is the method for getting my money back from IR since I've overpaid by £3000 - £400 = £2600?


PS: I'm in 40% tax bracket - only just.

TIA

texto

It sounds like the 2006-2007 was your first as a contractor. It is painful the first time you get stung with the payments on account because you end up paying two years' worth of tax in the space of 6 months.

In effect you have already paid the tax for the 2007-2008 tax year, so I think that you will get a refund of £2600. You will then have to pay £200 in January and £200 in July.

Usual disclaimer, I am not an accountant etc, etc.

[texto]

In 2006-2007 tax return, my tax bill was £3000. So Inland revenue asked for £3000 + two installments of £1500 in advance i.e. 6000 in total. Now in my 2007-2008 tax return, my tax bill is £400. So I think they will ask for £400 + two instalments of £200 in advance.

But I've already paid £3000 in advance.What is the method for getting my money back from IR since I've overpaid by £3000 - £400 = £2600?


PS: I'm in 40% tax bracket - only just.

TIA

texto