Paying income tax on account

[Spirits High]

My tax return for 10-11 is now all finally sorted and ready to be paid.

Since going self employed from leaving the Army this is actually the first year I've had to pay Tax

No problem with the amount owing but they've asked me to pay tax on account to HMRC.

So it's my outstanding tax bill plus a 50% projection on next years by 31 Jan 12. Then another 50% by 31 July 12.

Is this normal to pay a projected figure in advance of next years accounts or are my accountants just trying to soften the blow?

[Vectis]

Normal practice I'm afraid

I think you can apply for exemption but I'm not sure under what circumstances (presumably if you're planning to sell or scale back the business) but if it's all systems go for 2012-13 then it's hand in pocket time.

[Spirits High]

Normal practice I'm afraid

I think you can apply for exemption but I'm not sure under what circumstances (presumably if you're planning to sell or scale back the business) but if it's all systems go for 2012-13 then it's hand in pocket time.

Thanks Martin,

Thought it was probably the norm as my accountants are spot on. Just wanted to double check.

[yourdj]

I just got a bill for £1500 that "needs to be paid now".

It because I ticked the wrong box and said i was class 4 exempt or something?
I will leave it up to my account this year.

I have spoken to them and told them that is ridiculous and not too many self
employed people would not be prepared to pay that straight out.
They sorted out a payment plan up until next Dec.

The interest is only £15

As long as you show commitment to pay it then thats the main thing.

Its gonna be serious next year as I have not bought much kit so I have to start saving now

[Spirits High]

Its gonna be serious next year as I have not bought much kit so I have to start saving now

That's what I found with last year but had a plan in place so no major panic

[Vectis]

From the day I went self-employed I always put 30% of everything I earned into an interest-bearing account, out of which all my HMRC monies go.

There's usually enough left each year for a good holiday

Having gotten into the habit, it's never been a problem since. We just had one golden rule over the years and that was to never, ever, dip into the account no matter what. In that time there have been short-term crises that have seen me delivering pizzas and driving a taxi, but the tax money was always parked out of reach