FreeAgent’s Post

At the end of each tax year, HMRC send taxpayers, who are not within self-assessment, an ‘End of Year Tax Calculation – P800’ if they have underpaid or overpaid their taxes. This personalised letter indicates: #hmrc #P800 #taxes

✨ Your Payment on Account is due to HMRC by midnight on 31 July. ✨ Hopefully this isn't news to you!   Tax bills can be stressful and if you’re a business owner it’s likely that you’ve been pulled into HMRC’s Payment on Account system for your income taxes. Here's a quick rundown of what you need to know:   ❓What is it? ❇️ Payments on account are advance payments towards your tax bill. ❇️ You generally need to start to make payments on account when self-assessment tax bill is more than £1,000. ❓When is it due? ❇️ The first instalment is due on 31st Jan ❇️ The second instalment is due on 31st Jul. ❓How much do I have to pay? ❇️ Each instalment is based on half of the previous year's tax liability. ❇️ E.g. If your tax liability for the previous tax year was £4,000 you make two payments on account of £2,000 each.   ❇️ You can check what is due by signing into your HMRC online services account.   ❓What happens when my actual tax bill doesn’t match the estimate? My business income generally fluctuates from year to year.   ❇️ This is all worked out once you've filed your tax return.   👉🏽 If you have paid too much HMRC will give you the difference back. 👉🏽 If you owe more than you’ve already paid You’ll need to make a “balancing payment” to HMRC by 31st January following the tax year. 🔔 Missing the deadline could prove to be expensive HMRC’s interest rate for late payments is currently 7.75%. 💡 If you know for sure your tax bill is going to be lower than the previous year (for example you have fewer clients) you can ask HMRC to reduce your payments on account.   #taxtips #femaleentrepreneurs #hmrc #remindertoself

With a recent change in government continuing to dominate headlines, you might not be aware that your tax burden could be rising. 😥 Read our blog, linked below, to discover the changes which have contributed to the rise in HMRC's tax receipts, plus 2 ways you can keep on top of your tax liability. 👇

It’s almost the end of July, which means your second self-assessment tax instalment is due. 😯 But what happens if you're unable to afford the tax payment and experiencing cash flow issues? The good news is that there are options available to you. 😊 Ignoring the situation and waiting for HMRC to contact you is the worst thing you can do. 😣 Remember, you're not alone—take the initiative and reach out to HMRC first. Don’t forget that the Time to Pay option is still available to you and can be used for all taxes, not just self-assessment. #selfassessment #timetopay #taxbills #hmrc https://lnkd.in/d8Y9Z46u

DEADLINE REMINDER! Don't forget if you pay your tax on account, your next instalment needs to be paid by today. If you have no idea what I'm talking about then it's likely you don't have to make these payments, but you can check your Government Gateway to triple check. What are payments on account? If you have a tax liability over £1,000, payments on account are a handy way for HMRC to 'give you a helping hand' 👀 by having you pay in instalments. It works like this: ✨ HMRC assumes you'll make the same this year as you did last year ✨ 23/24: you owe £1,000 You will be asked to pay the first half of next year's tax payment at the same time. So you pay £1,500 on 31 January And you pay the second half on 31 July (today!) So you've paid next year's estimated tax bill already. In a perfect world, what you've paid so far will add up perfectly to equal what you owe when you file your tax return for real. If that happens then you just have to pay the first half of the NEXT year. And the cycle continues. If you owe a bit more when you file your TR for real, you'll have to pay the balance. If you owe less, you can claim the money back 😁 Just another way HMRC like to make our lives a bit easier 😆

⛔New late payment #penalties The new penalty system affects income tax, capital gains tax and VAT. It has applied to VAT payments since January 2023 but is yet to affect the other taxes. For most taxpayers the new rules aren't scheduled to apply until April 2026. However, they apply from April 2024 to anyone who signs up for the Making Tax Digital for Income Tax Self-Assessment (MTD ITSA) voluntary trial. ✅ Under the new system a penalty is triggered if you don't pay all the tax you owe within 15 days of when it's due. For self-assessment (including those using MTD ITSA) the due dates are 31 January and 31 July. ✅ The first penalty is 2% of the tax outstanding after day 15. If any of this tax is still unpaid after day 30, another first penalty of 2% applies. After that a second penalty accrues at 4% per annum on tax still owing. ✅ The second penalty is at the centre of the new regulations. These say that HMRC must charge the second penalty within two years of the tax due date. HMRC has discretionary power to reduce or not to charge a penalty for late payment if it considers that appropriate in the circumstances. This will include where there are special circumstances that cause a taxpayer to pay their #tax late. ▶️ For example A taxpayer owes £1,000, which they fail to pay on the due date. They approach HMRC asking for a time-to-pay (TTP) arrangement on day 11 and they subsequently agree with HMRC a schedule to pay off the debt. By approaching HMRC for a TTP arrangement, and subsequently agreeing one, the taxpayer enjoys the same benefit of paying their tax on day 11. Their position is the same as it would be if they had paid their tax on day 11 — there will be no penalty. Late payment interest will continue to accrue on any outstanding amounts.

Even the most organised business owners can occasionally find themselves struggling to pay their #SelfAssessment tax bill on time 😅 Here’s how to take control of the situation 👇

💡 Spread Your Tax Bill with HMRC Self assessment taxpayers can use HMRC’s Time to Pay to split their tax bill into monthly instalments. ✔️ Quick Online Setup for bills under £30,000 ✔️ Deadline: 31 January 2025 Need guidance? Rothmans can help. Learn more: https://lnkd.in/e33jnj_C #SelfAssessment #TimeToPay #TaxHelp #RothmansLLP

Problems paying your tax bill? If you miss a payment deadline or think you will miss one because you are unable to pay your tax bill, you must contact HM Revenue & Customs (HMRC) as soon as possible. You may have the option to set up a ‘Time to Pay’ arrangement – a payment plan agreed with HMRC allowing you to pay your tax over a longer period. https://lnkd.in/ecjMKKwv Ask us for help any time! 01424 730000 #accountantsbexhill #accountatnshastings #accountantssussex