Self employed - payment on accounts

[patchlau]

Hi there, It is my second year of trading as self employed and I have two payments due in January 2006 (Payments on account). I have the majority of the money to make the payments, but I am going to be a little bit short. Does anyone know what I should do? Should I contact the Tax Office, is there a way of making the payment in installments or a month late? I would appreciate any help Thanks

[bednobs]

patchlau, can you make it clear, are these debt a year old? or do you mean next jan?

[dzug]

You should contact the tax office. There are provisions for paying by instalments (plus interest of course). You might have to argue for them but they do exist.

If you don't contact them there will be automatic penalties.

[jennyp]

I made the mistake one year of paying all tax at one go, you pay half in January, and the other half begining of July, but please ring check tax office, and check

[NiceCupOfTea]

One of the payments will be for the remainder of any tax that hasn't been covered by the two estimated payments on account you've already made for 05/06, the other will be the estimated first payment on account for this year.

Ring up and get them to sort out a time to pay agreement, and as long as you stick to it you'll be OK, not sure you'll even be charged interest - ask when you ring them.

Alternatively, if you know that your current years profits will be lower, get someone to estimate your tax bill and reduce the payments on account. Only problem is, if you end up underestimating the tax, you'll owe interest on whatever the difference is.