31 July tax deadline
25th July 2008HM Revenue & Customs has sent out millions of statements to the UK's self-employed and others with untaxed income reminding them to pay their second tax instalment for the 2007-08 tax year by 31 July.
"The amount shown on the statement is calculated according to an individual's earnings for the previous tax year (2006-07). But if the amount you earned has fallen, or if you are no longer self employed, you could be entitled to pay a lower amount of tax than appears on the statement," explains Richard Mannion, national tax director at accountants and investment management group Smith & Williamson.
However, warns Mannion:
"While a reduction in the July payment will help to ease cashflow - which is clearly very helpful for anyone who has suffered a downturn in these difficult times - it's important to get your calculations right. If you reduce your tax payment below the final liability, interest will be charged from the date the tax payment fell due. So if you don't get your figures right, you will ultimately end up out of pocket."
"31 July has another important implication under tax self-assessment which is often forgotten. It's also the date for a second automatic penalty of £100 for anyone who has yet to submit their 2006-07 tax return, which was due in January. One way or another, 31 July is an important date for your diary."
Individuals who think they may be entitled to a reduction in the July tax payment (strictly known as a payment on account, in this case for 2007-08), should obtain form SA 303 from their local tax office or at http://www.hmrc.gov.uk/selfemployed/fagsa303.shtml. They will need to state what figure they are reducing the payment to and the reason for the reduction.
For further information, contact:
Richard Mannion - national tax director at accountants and financial advisory group Smith & Williamson
Tel: 020 7131 4252
E-mail: richard.mannion@smith.williamson.co.uk
For further general information, see our website: www.smith.williamson.co.uk
PR enquiries:
Layisha Laypang, tel: 020 7131 4550
Ali Hayman, tel: 020 7131 4138
Disclaimer
By necessity this briefing can only provide a short overview and it is essential to seek professional advice before applying the contents of this article. No responsibility can be taken for any loss arising from action taken or refrained from on the basis of this publication. Article correct at time of writing.
Note to editor
Smith & Williamson is an independent professional and financial services group employing over 1,500 people. The group is a leading provider of investment management, financial advisory and accountancy services to private clients, professional practices and mid-size corporates. It operates from offices in London, Belfast, Bristol, Dublin, Glasgow, Guildford, Maidstone, Salisbury, Southampton and Worcester.
Smith & Williamson Limited
Regulated by the Institute of Chartered Accountants in England and Wales for a range of investment business activities. A member of Nexia International, a worldwide network of independent accounting firms.
