I didn’t really get payslips for a lot of the work I did on that tax year. Just the invoices I sent off.
Fortunately I’ve got enough set aside to cover this year’s tax, but I’ve only just got my stuff together for the last tax year let alone this one, so not sure how that’s gonna work.
Anyone applying for the support scheme? Apparently I’m eligible and can submit my claim on the 16th. Dunno if that date’s universal or they’re staggering it.
If the tax you owe is over £1k, you pay payments on account in January/July based on the previous years return. E.g. if filed your 18/19 return and owed £1.5k, you have a payment on account for 19/20 in january 2020 of £750 and July 2020 £750. Any additional amount is a balancing payment due in January 2021. If you owe less than the previous year, the payments on account reduce to half of the actual amount.
When it first kicks in it can be quite bad, as you end up paying 1 and half years tax in one go but after that spreads the amount over two payments.
You can reduce them if you think you’re tax is are going to be lower than the previous year, but can be charged interest if you reduce them incorrectly.
Ah right, think I’ve got it. Had a bit more of a thorough look through my account government gateway for the first time since I actually filed my 18-19 return and it says elsewhere I don’t owe any tax, which is the impression I already had from my fairly negligible earnings that year (which probably means I won’t be eligible for much with this support scheme if that’s all they’re going off)
Think that might be a more generic message displayed for everyone with the deferral option due to corona? The mention of second payment spooked me a bit as I’ve made no first payment and haven’t had anything anywhere suggesting I should have.
It looks back to 16/17 17/18 as well 18/19 and takes an average. It doesnt seem to pro-rata up the average, if someone only traded part of year though, which seems strange.
Update for people who, like me, think HMRC only does stuff on paper - the checker is an online thing, which apparently has been all over the news but just in case anyone’s missed it:
Just sorted out this year’s return for the first proper year of self-employment and actually having taxable earnings. This ‘payment on account’ thing is a nasty surprise, eh? Had no idea it was coming (although re-reading this thread I probably should’ve, oops) but fortunately have enough to cover it, and the second July payment.
The thing I don’t get is how it keeps rolling over. All going well I’ll no longer be freelance/self-employed for the 2021-22 tax year - how is that going to work in a year’s time if there’s nothing extra to be taxed on in advance?