Tax Return 2006/7 -150% ??

[maxima]

This is my first after a full year of contracting. I filled IR online form (not submitted yet) and it says: tax due 9000, payment by Jan 2008. 13500!
Q: am I supposed to pay 100% of 206/7 tax and some 50% up top? Is it "projected" 2007/8 advance payment? Is it normal practice to pay tax in advance??

[Sockpuppet]

Are they late penalties?

Were you operating as Ltd, MSC, Self Emp, Sole Trader etc...

[ASB]

This is my first after a full year of contracting. I filled IR online form (not submitted yet) and it says: tax due 9000, payment by Jan 2008. 13500!
Q: am I supposed to pay 100% of 206/7 tax and some 50% up top? Is it "projected" 2007/8 advance payment? Is it normal practice to pay tax in advance??

Yes. The assumption is that your higher rate tax for next year will be the same as this year and 50% of it is due Jan 2008 (which is not entirely unreasonable given it covers the 9 month from April 07-Jan 08. so you are not strictly paying in advance).

you can appeal it down to nil (or any other sum) but the interest will be payable if it turns out it was due.

[cojak]

'Fraid so.

They're not penalties, just 6 monthly tax payments.

You should see my Outlook task reminders...

[fzbucks]

My Corporation Tax was over double what last years was, my accountant said it was due to Brown getting rid of the tax relief for small businesses.

I thought it wouldn't make that much difference, seeing as my profit was much lower this year due to paying myself a higher salary.

Anyone else noticed a hike in the CT they've paid?

[maxima]

Yes. The assumption is that your higher rate tax for next year will be the same as this year and 50% of it is due Jan 2008 (which is not entirely unreasonable given it covers the 9 month from April 07-Jan 08. so you are not strictly paying in advance).

i would disagree. TaX period is a constant. Whatever my tax is. if it due in 2008 when so be it.

In this country you are intentionally groomed by state & big business to believe in things were nether existed. Sorry to spoil your weekend

P.S. Until it finished and your earnings has not happened (end of March 2008). there is no tax. so this payment is a deposit in fact...

[maxima]

'Fraid so.

They're not penalties, just 6 monthly tax payments.

that is exactly the point. if i will have filled taxreturn for apr-sep 2007 and extra 4500 descended fromthat, then it is tax i owe. but tax period ends in mar 2008. until that - it just money they took away.

i dont really see anything fair here...

[ASB]

Until it finished and your earnings has not happened (end of March 2008). there is no tax. so this payment is a deposit in fact...

Correct it is a Deposit. It just puts people who receive untaxed income in the higher rate bracket in broadly the same position those on PAYE.

It does feel like you're hit hard in the first year though. If it really bothers you appeal it. All you've got to do is write a letter to the tax office (and accept the interest if it turns out it was really due). This is probably not a good time to mention the second payment on account is it?

[max]

My Corporation Tax was over double what last years was, my accountant said it was due to Brown getting rid of the tax relief for small businesses.

I thought it wouldn't make that much difference, seeing as my profit was much lower this year due to paying myself a higher salary.

Anyone else noticed a hike in the CT they've paid?

Are you sure the first 1p tax increase is affecting you already? You normally pay CT 9 months after your year end, so I can't work out how this could be impacting now.

Maybe I'm missing something.

When the first increase takes affect, on 100k profit, it will be an extra 1k, so expect tax to pay to increase by 5%(not 50%).

Maybe you just made 50% for profit. Turnover up and expenses down?

Check your previous annual report.

[fzbucks]

Are you sure the first 1p tax increase is affecting you already? You normally pay CT 9 months after your year end, so I can't work out how this could be impacting now.

Maybe I'm missing something.

When the first increase takes affect, on 100k profit, it will be an extra 1k, so expect tax to pay to increase by 5%(not 50%).

Maybe you just made 50% for profit. Turnover up and expenses down?

Check your previous annual report.

Turnover is much higher than previous year but profit is down due to increased expenses and now paying myself a higher wage and also paying the company secretary.

I asked the accountant why it was higher and he said it was due to the removal of the small company releif (or whatever it's called)