I Have ask the HMRC a very simple question and I do not think the guy on the end of the phone understood my question.
Basically I am self employed and do not earn much . To payments easier, I asked if I can make payments early during
the year, so the two payments due in January and July do not hurt so much.
You would think a simple question.
So, I come back to the LocostBuilders again for help.
Make a payment into a seperate bank account?
What he said, we have an interest earning account that we keep funds solely for both personal tax & VAT in until payment is required, that way we get a minuscule bit of interest on it also.
Tried that. Easier said than done.
When times get hard it's fairly easy to get at savings. I know a more self discipline should be used.
But, Out of sight out of mine.
Even £25 -£50 pound a month will help.
Plus the making or losing interest is so small now there is not must point in savings.
I use a standing order to a building society account which I must go in to branch to access.
To answer the question , I am certain any early payments you make to your account will show on your Jan./Jul statements . But like the others I tend to put some aside in an Esaver or similar.
As everyone else has said, I have a second account for tax funds. Running 2 businesses that has corporation tax, 1/4ly VAT bills etc., it's just
not worth the risk of not having the funds there.
I always make HMRC wait until about 1-2 weeks before due date before I pay, and accumulate the interest (albeit miniscule amount) in my account rather
than theirs.
As part of this account, I also don't have access to withdraw money without going into the bank in person, although I can pay into it using
internet banking.
The way I look at it is this; if you were employed by a company then the payments would be deducted automatically by HR - you'd never see the
money. As such, the onus is now on you to make the deductions and treat as "not your own cash".
With regards to making multiple payments, my accountant has said this is allowed if you just make use of the same reference number of the HMRC invoice
they send you. But each to their own, as it's very much a personal thing.
Do you use an accountant? They might be happy to take monthly payments and pay out the tax when due. You'd pay for the service though.
DavieP's seems a good solution, making it harder for you to access the money.
quote:
Originally posted by daviep
I use a standing order to a building society account which I must go in to branch to access.
You can make standing order budget payments see here. http://www.hmrc.gov.uk/payinghmrc/dd-intro/ndds.htm#6a
If you don't earn much then you probably won't pay much if any tax as it's on your profit not turnover.
Wow So much advice.
I had an accountant until this year. My business accounts is very basic.
My accountants bill was a bit high. The extra hours I spent doing it online, saved somthing like £100 an hour.
Shame I don't earn that amount.
I was always happy with their services , but doing it my self online was the better option for me, and my tax bill has not changed much doing it
myself.
Anyway, thanks for all the advice.