Monthly Archives: February 2017

Budgeting for your tax bill

For most of us 31 January is that dreaded deadline for getting your self assessment filed to avoid penalties.

Many people tend to have a habit of leaving the submission of the return to the last minute, or providing their accountants with the required information, but with it can often come with a shock! Yes the dreaded bill.

This year saw the inclusion of class 2 NIC  along with the normal collection of any class 4 NIC and tax. When leaving everything to the last minute, many haven’t a clue what their self assessment liability is likely to be. Furthermore for those in the early years of self assessment there is the added payment on account that effectively means that for the first time you could be paying one and a half times the amount due, as do not forget if you started work say on 1 May 2016 your first tax bill is not due until 31 January 2018. This is why HMRC say if your tax bill is over £1000 for 2016-17 then they want a payment on account for 2017-18 paying in January 2018 and once again in July 2018.

That is why we introduced a rolling tax screen in Taximanager to help our users budget towards their tax bill, but this really is only of any use to those making entries on the go, or in real time as it is referred to these days. Playing catch up like some do, loses this excellent facility.

Being self employed is all about discipline, when it comes to tax. If you don’t set it on oneside then you can be shocked by the amount you maybe asked to pay. Many who fall foul to this feel they spend the rest of their self employed working life, playing catch up to pay the taxman. We at Taximanager do not have a magic wand to pay your tax, all we can do is provide you with a system to follow.

There is a link below to a youtube video produced by  HMRC which you may find interesting and helpful.It is worth watching.

You can always set up a direct debit, to pay your tax in advance weekly/monthly etc, this as stated is for advance payments, not arrears. Please see the link below, it will also show you how to set up an online account to do this.