I have a fairly new client who employs 1 employee on a 4 Weekly basis. This is a second job for the employee and was taxed BR on a low income resulting in a $70 tax payment (no NI) payment being due to HMRC for Q9. A new tax code has now been issued resulting in a tax refund being due to the employee on the period ended 8th Jan. Instead of paying HMRC by 22nd for Q9 and then requesting a refund, Is it possible and correct to file a Nil Payment Due to HMRC for Q9 to save having to pay then refund as the year to date P32 shows that no monies are due to HMRC.
Thanks in advance.
Dean
Hi Dean, how are you doing? Hope business is going well on the other side of the water.
My understanding is that payments each month are not hugely important, it is the total amount paid at tax year end that needs to balance on submission of the P35. HMRC don't know what amount they should be receiving each month, they just know they should get something (hence having to do nil returns). This will change with the introduction of RTI but we can worry about that when it happens.
In summary then I would being doing exactly as you propose.
Nice to hear from you. Hope you are keeping well. Things are slow but steady and gradually building up. I am still employed full-time but hope to be able to reduce my hours soon with the income I'm generating so here's hoping (with the way things are going, I think they'll be happy to reduce my hours .
In response to the question, thanks for the reply. It was kind of what I was thinking but I needed that clarification and advice from someone else. It's strange you mention RTI as I was just thinking about that myself with the introduction of it from next year as I suppose there would be no work around with a scenario like this (and extra work!). I use 12Pay and I know that they are working towards software upgrades to accommodate it so I'll have to keep an eye as to the changes and updates as they happen.
A major driver for the introduction of RTI (an HMRC official told me) is that HMRC wants to get a tighter grip on in-year money collection. They believe that at the moment many businesses are fiddling the payments in-year, and making a correcting payment in April to tally with the P35. (and I'm not talking about minor issues like the one suggested here, where it is administratively easier to move a payment and that is the main motive, I'm talking about significant sums being held back until year-end)
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