Thursday 1 December 2011

Can you defer paying £3,000 tax?



Until recently personal tax bills of up to £2,000 Could be repaid through your PAYE tax code. Next year the figure rises to £3,000, Can you take advantage of it now?


PAYE Advantages Those paying their taxes through the PAYE system, directors, employees and pensioners, can choose to spread their tax bill for one year over a later one. This is done by adjusting their PAYE code for the later year adjusted to recover what they owe. Finance Act 2011 increased the amount recoverable in this way to £3,000 from the next tax year but HMRC has now brought this forward.


Not too late The notes to the 2010/11 tax return correctly state that you cannot have any underpayment coded out if it is more than £2,000. However HMRC have recently announced they will extend this option for bills of up to £2,999.99. (See http://www.hmrc.gov.uk/payinghmrc/taxcode-vdp.htm#1 )

TaxTip Even if you have already submitted your 2010/11 return showing tax payable by 31 January 2012, you can take advantage of HMRC's recent offer by telephoning them asking for your tax bill to be coded out.


December Deadline If you haven't completed your return yet, but suspect you owe HMRC money, you need to get your return to them by 30 December to take advantage of the coding option., After this date, the coding option is not available and any tax due must be paid by 31 January 2012,


No Tax Return If you are not in the self assessment system but have received a tax calculation (Form P800) for 2010/11,you'll automatically benefit from the new limit. HMRC will simply include the amount due in your 2012/13 code. If this does not happen, contact HMRC immediately.


Time-to-pay-deals Bad news for those paying their tax under a time-to-pay deal. HMRC have said the new coding-out rule will not apply to them and they must stick to the schedule of payments already agreed.


To Do If you owe tax of less than £3,000 for 2010/11, phone HMRC by 30 December and ask them to reduce your 2012/13 code to take this into account. This will spread the bill over the next twelve months beginning in April 2012.
Posted by at

No comments:

Post a Comment

Subscribe to: Post Comments (Atom)

Disclaimer

The information contained on this site is for general guidance only. You should neither act, nor refrain from action, on the basis of any such information. You should take appropriate professional advice on your particular circumstances because the application of laws and regulations will vary depending on particular circumstances and because tax and benefit laws and regulations undergo frequent change.

Whilst I will do the best i can to ensure that the information on this site is correct at the date of first posting, I shall not be liable for any loss or damages (including, without limitation, damages for loss of income or business or increased liabilities) arising in contract, tort or otherwise from the use of or inability to use this site, or any information contained in it, or from any action or decision taken as a result of using this site or any such information. Third parties are responsible for ensuring that material submitted for inclusion on this site complies with appropriate law. I will not be responsible for any error, omission or inaccuracy in the material submitted by third parties.

I accept no responsibility for the availability or content on any site to which a hypertext link from this site exists. The links are provided on an "as is" basis and I make no warranty, express or implied, for the information provided within them.


You are permitted to access, print and download extracts from this site on the basis that the use of all material on this site is for information and non commercial or personal use only; any copies of these pages saved to disk or to any other storage medium may only be used for subsequent viewing purposes or to print extracts for personal use.


By accessing any part of this site, you shall be deemed to have accepted these terms in full.


These terms shall be governed by and construed in accordance with English Law and the courts of England shall have exclusive jurisdiction.

I will not respond to individual queries posted as comments on this blog. If you need advice on a specific situation, email the full details to me at jpointon@gmail.com.