Tax Return question - "payments on account"

[lamboman]

Hi,

I shut down my limited company in FY 07/08 and my accountant worked out I had to make the below two payments, based on my 07/08 Tax Return.

I have been on PAYE as a permie for FY 08/09, so based on this I have 2 questions that I would appreciate anyone's help with:

1. Do I still need to make the second payment on account due on 31 JUL 2009?
2. As I was on PAYE for 08/09, I assume I can claim the "payment(s) on account" back. If so, when can I do this and how?

Any help would be greatly appreciated!

Thanks.


SUMMARY OF PAYMENTS DUE:

1. To pay on or before 31 Jan 2009

Balance outstanding for 2007/2008: £2816.10
Plus first payment on account for 2008/2009: £1408.05
TOTAL DUE 31 JAN 2009: £4224.15

2. To pay on or before 31 Jul 2009

Second payment on account for 2008/2009: £1408.05
TOTAL DUE 31 JUL 2009: £1408.05

[sweetandsour]

My understanding is that you can request the payment on account to be reduced (to nil if appropriate) if your earnings are going to be lower in the next tax year, but be absolutely certain that you won't end up owing the money because the taxman will take a dim view if you do.

EDIT - I think form SA303 from HMRC is what you need.

[Hex]

My understanding is that you can request the payment on account to be reduced (to nil if appropriate) if your earnings are going to be lower in the next tax year, but be absolutely certain that you won't end up owing the money because the taxman will take a dim view if you do.

EDIT - I think form SA303 from HMRC is what you need.

Basically the tax man will charge you interest on any amount that you end up owing in tax that would have been covered by your payment on account, but which wasn't because you decided to reduce it. I think there may be £500 grace on this because under this amount it can be collected via PAYE, but I'm not certain.