Planning January 31 Tax Payments
Newsletter issue - January 09.
Remember remember 31 January, because that's when your biggest tax payment is due, particularly if you are self-employed. You will need to pay any balance of tax due for 2007/08 by that date, and at the same time make the first payment on account for the tax due for 2008/09.
If your business is not run through a company, your profits are taxed in the tax year in which your accounting period ends. Say your accounting period ends on 30 June 2008, the profits for that period are taxed in 2008/09, and the first instalment of that tax is due on 31 January 2009. Where this accounting period has produced much lower profits than the previous year, or even a loss, you can elect to reduce your 2008/09 tax payment on account. But please ask us to check your figures first as you will be charged interest on any tax that is later found to be underpaid.
It is very important to plan for this big tax payment, and if you think you won't have the funds to pay the full amount due, you should contact the Tax Office as soon as possible. There is now a new helpline number devoted to these sorts of problems: the Business Payment Support Service on 0845 302 1435, which is open every day from 8am. This service is staffed by tax officers who can arrange to spread your tax payments over a reasonable period. They can also deal with payments of VAT, PAYE, national insurance and corporation tax.
