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Payments on accont for 2014/15

Payments on accont for 2014/15

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For someone who is both employed (their main source of income) and self employed (a temporary arrangement that finished in June 2014) how can they avoid having to make payments on account for 2014/15 that are based on their self employed earnings for 2013/14, which are much higher?

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07th Feb 2015 17:00

Estimate and reduction if appropriate

If Self employment finished in June 014 your accountant should be able to prepare your final accounts and estimate the liability ob the assumption all allowances are in your PAYE code.

If that liability is actually less than the payments on account you can apply for a reduction.

The only way to avoid payments on account altogether is to have no taxable profit in 2014/15 which you cannot assess without the final accounts

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07th Feb 2015 18:57

If you don't have an accountant

Hi - the most important thing is to make sure you don't reduce the POAs by more than you think is likely to be your lability for 2014/15.  So if the POAs indicated by the 2013/14 liability = two lots of £1,000 and you think your actual total liability is likely to be £300 then just reduce to two lots of £150.  If you have any doubt volunteer a bit extra as you will be charged interest on over reduction.

There is a form SA303 you can send it, link at the bottom of this page on HMRC's website.

 

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07th Feb 2015 21:15

Or ....

.... if you're registered online yourself, go to your account and select "Reduce Payments on Account" from the menu and follow the instructions.

Take notice of what Marion and Paul say about the level of payments but don't get too hung up over it.  So long as you're reasonably close, you won't get penalized though you may have a few quid to pay in interest.

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