chrome

Hi gang,
Can I contest a request for "payment on account"??
I have NO dividends due this year as I sold all of my shares and will not be acquiring more for the time being..
I told the revenue this on my return but they appear to have ignored it

Also, the bill says that the first payment on account for 2002/2003 is due on jan31st, then again on 31st of july????
Wtf???

..am going to phone em on monday and plead with em.

Any ideas?

Sheepsplitter

Payment on account consists of some tax from previous year and some tax for the estimate of your earning for the current year.
It's likely the tax you have to pay will be the 'top up' to complete your tax payments for the last year. Even if you estimate £0 earnings for the next year, your more than likely going to owe a little tax from the previous 12 months.
Yes you do also have to pay both in Jan and July, but it's the Jan payment that is usually the big one as it includes tax for top up.

AndyC_772

iTrader: (2)

Yes, you can argue - although success may depend on whether you get to speak to someone with half a brain.

A request for payment on account is triggered if you receive a significant chunk of your income (I forget the %age) gross, and end up paying the tax yourself through your tax return. If the IR reckon that you'll be doing the same the next year, they demand a payment on account so that the money will end up sitting in their account earning interest, and not yours.

With a one-off event like the sale of shares, I wouldn't have thought it was too difficult to persuade them that you're not going to be receiving the same again in subsequent years. I presume you're talking about CGT here?

I think there's even a box on the return where you can explain why you shouldn't have to make payments on account - did you fill this in? Either way, there's no harm in kicking up a fuss.

Even if you do end up having to pay out, it's obviously deducted from what you're asked to pay in tax in a later year, so it's not gone forever, but I agree that it's a PITA especially if it's a large amount.

A.

chrome

Thanks guys..

"Yes, you can argue - although success may depend on whether you get to speak to someone with half a brain."

*hm.. that might be a challenge in itself! lol

SNIP"If the IR reckon that you'll be doing the same the next year, they demand a payment on account so that the money will end up sitting in their account earning interest, and not yours."

*This is my point. I can guarantee that my income this tax year (2002/3) will be lower, and that any "bonus" will be teaxed thu PAYE, and I have no shares from which to gain dividends.

"With a one-off event like the sale of shares, I wouldn't have thought it was too difficult to persuade them that you're not going to be receiving the same again in subsequent years. I presume you're talking about CGT here?"

*No. Not cgt. But even so, my one lot of shares in a firm are now cashed in (hence dividends declared on my return).
Im back to PAYE now.

"I think there's even a box on the return where you can explain why you shouldn't have to make payments on account - did you fill this in? Either way, there's no harm in kicking up a fuss."

*Yup. Filled it in and stated my reason very clearly.

"Even if you do end up having to pay out, it's obviously deducted from what you're asked to pay in tax in a later year, so it's not gone forever, but I agree that it's a PITA especially if it's a large amount."

*Yup. PITA agreed. Due to payment on account it will temporarily clear out my savings ;(
The 50% they want is a substantial amount for me to just hand over just like that.. why the hell they cant just read the box I filled in and tax me on what I have not what they think I might get... work assured me that they wouldnt request it, so to told I have got to trump a large sum quite soon is quite a kick in the teeth .. and near xmas too.. *******s!
thanks for the advice guys.

Sheepsplitter

chrome: It's totally up to you what you pay for the 'on account' bit. Just note that if you underpay they will charge interest on the difference (at about 6% I believe).
If you don't think you will earn as much then don't pay as much on account. The box is for there information really to save you getting an investigation triggered by default.

chrome

..oh right..

the statement doesnt mention it being optional..
will find out more on monday.
cheers.

templar

The payment on account is NOT optional. You can get the amount reduced if you expect your tax bill next year to be lower (which it will be as you're now entirely under PAYE), but you nust do this either via the tax return, or a form SA303, and you must do it before the payment becomes due. Failure to pay the amount demanded can result in surcharges as well as interest.

I'm not surprised the revenue didn't take account of the entry on your return. They tend not to bother reading the additional information when the returns are entered onto their system. If you mention to them that you put this on the return when you talk to them on Monday, they might reduce the payment on account for you there and then.

Hope this helps

WRXBOB

Am I the only one who was pleased with his tax bill ?

I'm earning 4x more now that I'm running a business, but only pay a fraction of what I used to pay in Tax and NI when employed!

My accountant is worth every penny I pay him (Less than the cost of a decent track day)

Bob

chrome

so; I can write back to the IR and reduce the on account to nil providing that my liability doesnt change (cgt, shares etc..)..
if it does they then re claim the full amount plus surcharges and interest!


thank god for PAYE..