Tax Bill - When to pay it?

[xe300]

Hello Forum
I have just completed one years business as a soletrader and have had my books completed for the tax man.
The sum that is required to pay HMRC has been calculated for 2012/13

Do i now wait for HMRC to send me the bill or do i have to pay it of my own free will ?

I am expected to pay 1 1/2 years tax by jan 2014 but i am not sure how it is paid. (i haven't had much luck searching either)

I apologise for asking this simple question that i should be asking my tax accountant but apart from being expensive it is also embarassing for me (small fish syndrome)
I have managed to understand a lot about my accounting books in the first year but need another year to feel confident about it.

Looking forward to learn more with this forum.

 

[StevensOnln1]

How to pay your self assessment tax bill

http://www.hmrc.gov.uk/payinghmrc/selfassessment.htm

The deadline for payment of 2012/13 tax is 31st January 2014 but there is nothing to stop you paying earlier if you want to. You will need your unique taxpayer ID which is shown on most letters from HMRC and on the front of the notice to complete your tax return.

 

[John44]

I have completed my self assessment for 2012/13 and HMRC are going to collect the tax through my tax code for the year 2014/15.

I presume that is because it is less than 3k but what happens if I am out of work or not working? when does the tax become due then when they are not collecting it through PAYE?

 

[MyAccountantOnline]

.... i should be asking my tax accountant but apart from being expensive it is also embarassing for me (small fish syndrome)
I have managed to understand a lot about my accounting books in the first year but need another year to feel confident about it.

You should NEVER feel embarrassed to ask - you are paying for a service and thats why you use an accountant.

 

[MyAccountantOnline]

I have completed my self assessment for 2012/13 and HMRC are going to collect the tax through my tax code for the year 2014/15.

I presume that is because it is less than 3k but what happens if I am out of work or not working? when does the tax become due then when they are not collecting it through PAYE?

Have a read here - it should help.

 

[John44]

Yes I read that link but it doesn't really apply to me. They have said they will collect it through my tax code in 2014/15 which is after the 31/1 deadline.

 

[Newchodge]

If you don't earn enough to pay off the tax through your next code, it will go onto the following year's code. I don't know if they ever get around to charging you the tax if you never earn enough to pay it through PAYE.

 

[MyAccountantOnline]

Hi John

You said when does the tax become due then when they are not collecting it through PAYE?

If you go to the link it does give you the due dates.

 

[John44]

To rephrase. HMRC said they will collect my 2012/13 tax liability through 2013/14 tax code. If they are unable to collect it because I am not working for example then at some point in that tax year (2013/14) they will realise the amount is not being collected so will they send me a immediate demand? And if so would it attract backdated penalties/interest?

 

[davies515]

In response to the original post - yes you will be sent a statement of how much, how and when to pay, but if this is your first self assessment it will not be posted to you until late this year or in January 2014.

This is something your accountant should have told you when he informed you of your tax liability.

 

[John44]

When I said HMRC 'said', I should have said HMRC have sent me a statement of account for the tax year 2012/13 saying the amount I owe will be collected through my tax code in the year 2014/15. My question is what happens to this liability if they are unable to collect that tax in 2014/15 through PAYE? Do they;

a) Roll it over in 2015/16 tax code and keep trying to recover it that way, does it crystallise ever if they can't recover using PAYE or;
b) At some point send me a demand for the entire amount. If this is the case, would it attract interest and penalties backdated to 31 Jan 14?

Cyndy - I think you're the only one so far that has understood me!

 

[davies515]

Sorry John44 I was replying to the original post from xe300.

John44 it is not a situation I have come across but I would assume that if you are not employed or registered through the paye system as being employed the tax liability would be adjusted back onto your self employment tax record and they would send you a demand for the amount due.

 

[Newchodge]

Cyndy - I think you're the only one so far that has understood me!

Can I quote you to my husband

 

[John44]

Sorry John44 I was replying to the original post from xe300.

John44 it is not a situation I have come across but I would assume that if you are not employed or registered through the paye system as being employed the tax liability would be adjusted back onto your self employment tax record and they would send you a demand for the amount due.

- Which is fine but I want to know if it would attract backdated interest and penalties,seems it's a bit of a unknown grey area then judging from the variety of responses.

 

[Newchodge]

- Which is fine but I want to know if it would attract backdated interest and penalties,seems it's a bit of a unknown grey area then judging from the variety of responses.

You certainly won't get penalties as you haven't failed to pay or report anything.

I don't believe you will get interest, as it stopped being money due to HMRC by a set date and became a part of your future tax calculation.

I don't think it is anything to worry about.

 

[John44]

Thanks Cyndy!

 

[xe300]

Thankyou Davies for this simple answer.
It was my first self assessment and as they have pre-calculated the first 6 months tax for 2014, it would be sensible to wait until the request of payment arrives from HRMC.

What do most people do with that money on their account until they pay it ?
Can it earn interest ?

If the 2014 calculation was above what i actually earned , what would be the procedure for getting it adjusted and when ?

To be fair to my accountant, he may have mentioned the procedure of payment but with everything going on as a one man show, i may have missed or forgotten his advice.

This forum eases my personal stress level of not knowing everything and it gives me the valuable opportunity of learning from other peoples mistakes.

Much appreciated
Martyn

 

[Scalloway]

If you want to reduce your payment on account use this form

http://www.hmrc.gov.uk/sa/forms/sa303.pdf

 

[John44]

Martyn - Apologies to you for hijacking your thread.