The next HMRC payment deadline is approaching, for the second payment on account due by 31st January 2013.
As payments on account are estimated based on the previous years figures, it is possible to apply to have these reduced should the tax liability have fallen.
However, in order to do this accurately you have to know what the actual liability is. Thankfully by now, most people will have received all the paperwork they need to prepare the tax return and accounts.
There is still time to prepare the return and accounts before the tax payment deadline, and if profits have reduced then a reduction in the payment on account could bring welcome relief.
It’s the reason why the first reminder of the year has gone to our clients this month, so that the accounts and tax return can be finalised in advance of the deadline to see if the 31/7 payment can be reduced.
Even if the payment cannot be reduced, it does not increase – so the advantage is that people know their tax liabilities well in advance and can plan for them without worrying about an unexpected tax bill.
If you know anyone who has a payment on account due this July, but thinks it may be too high, please do put them in touch with me. I offer a no-charge initial meeting, with a limited number of evening and weekend appointments available each month.