Payments on Account

JodieR

Client's tax bill for 2007/08, his first year of self employment, is £1400, so he has payments on account of £700 each for 2008/09. He's phoned me today though to say that he only thinks he'll make about £7500 in 2008/09, which means that he's only going to have a tax bill of approx £400. Do I need to reduce his payments on account to £200 each, or will he not have to make PoA as his 2008/09 liability is under the limit?
Jodie

T.C.

He should already have paid both payments on account anyway, shouldn't he? If not, I would reduce to the £200 and advise him to pay that asap.

Dean

His payments on account for 2008/09 are based on this 2007/08 Tax liability. On your figures; he won't have any 2009/10 payments on account to make.

You can reduce the 2008/09 payments on account by submitting form SA302. However, if it turns out the payments on account are reduce by more than they should have been (determined by the 2009 Tax Return) the Revenue will charge him interest.

Regards

Dean

JodieR

T.C. wrote: »

He should already have paid both payments on account anyway, shouldn't he? If not, I would reduce to the £200 and advise him to pay that asap.

No, 2007/08 is his first year of trading, so the £1400 is due 31/01/09. Originally I had told him he would need to pay a total of £2100 on 31/01/09 (£1400 + £700 PoA), but now I have reduced this to £1600 (£1400 + £200 PoA).

Thanks Dean!

deanshepherd

Dean wrote: »

You can reduce the 2008/09 payments on account by submitting form SA302.

SA303..

:001_tongue:

Dean

deanshepherd wrote: »

SA303..

:001_tongue:

I'll give you that one :001_tongue: must have been a slip of the finger!!



You're welcome Jodie.

Regards

Dean