There is a big self assessment tax to pay for 2013-2014 and then the on account payment for 2014-2015 in July, however the person stopped being self employed in July 2014. Can this all be submitted in the same self assessment or does the three months have to be done in April when the new year portal opens?
Also its obviously created a liability for 2014-2015 on account however this much will not be payable due to going to employed PAYE job.
Hi
I would suggest that they need to be kept in separate tax years. That said do HMRC know that the person is no longer self employed? If not they need to phone then they can talk about the payment on account. If you are already aware of the profit figure they may consider reducing the figure. When HMRC are made aware of a business ceasing they usually send you a final NI bill and will a little later send you a form - 'self assessment claim to reduce payments on account'. In fact I think they send these with the self assessment statements. Its a form SA303 - no doubt you can also get them from the 'forms' section of the HMRC website, or on the online service via 'Customer services'--->request us--->select Reduce your payments on account. You do only have until 31 January to get this form in though. (care see the guidance notes on SA303)
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Joanne
Winner of Bookkeeper of the Year 2015, 2016 & 2017
Thoughts are my own/not to be regarded as official advice,which should be sought from a suitably qualified Accountant.
You should check out answers with reference to the legal position
Create 2014-15 cessation figures and calculate tax. (Bear in mind you will need to "sell" any business assets to the trader on cessation, and this might affect your capital allowances computation. And in turn, the tax bill.)
If the latter can be done in time for 31 Jan deadline, you can claim to reduce the payments on account when completing the tax return online, and pay the reduce bill.
If 2014-15 figures cant be done in time, and the figures are small, you could consider only paying the 2013-14 tax bill for now, and clear up the rest as soon as possible after 31 Jan, suffering a small amount of interest on the payment on account. You would have to fill out a form to reduce the payment on account, in that case, I think - maybe someone will clarify. It's either that, or pay what you owe (2014 plus first payment on account) and then apply for a refund once you have the figures ready.
When you complete the 2014-15 tax return, you would state that the business had ceased when completing the self employment page. You then need to consider whether you need a return at all for 2015-16, and inform HMRC if not.
Thank you, basically its a very basic self assessment, the person works for an umbrella company but earns a lot of money!!! There is very little to be reclaimed. There are no assets etc its just there is a large tax bill, made larger because f the 14-15 payment on account and this is what I was looking at only he terminated with the umbrella company 1/7/14 and found employed work there is also some CIS reclaim at the end of the self employment again this falls into 2014/2015
If you can get his cessation figures for 06.04.14 to 01.07.14 before 31 Jan, then you can claim to reduce the payment on account, when you file the tax return... well you can on HMRC webfiling service - not sure about other software, but I am sure they will all have some facility.
You can then save the 01.07.14 taxable figure until 05.04.15 tax return is due, and include it on the return, which will also disclose the P60 figure from the new employment. If there is no other income at that point, you should be able to deregister.
If you can get his cessation figures for 06.04.14 to 01.07.14 before 31 Jan, then you can claim to reduce the payment on account, when you file the tax return... well you can on HMRC webfiling service - not sure about other software, but I am sure they will all have some facility.
Hi Michelle, can you tell me how this is done. I want to make a reduction on account for a client but other than adding it to further information box, I can't see how you do it. I'm using HMRC webfiling.
I have found where you do it its on the side panel BUT it states reduce payment on account for April 2014 and its the following year I want so assume you can only do this AFTER 31.01.2015??
When you are completing the 2014 tax return itself, it asks you on one of the last pages before you run the calculation.
I haven't actually needed to tick yes before, but I assume it then gives you a box to fill in the payment you want to make. You could have a play about with it John, before you submit? And maybe tell us what you see?
Taylor, when you complete this box on the 2013-2014 return you are making a statement about the payment on account for the 2014-15 year. If you claim it after 31.01.15 that means you have to pay it first - and then get a refund, or, be late with part of the payment.
In the "6. View your calculation" section, under "view and print your full calculation, it says "next" - when you click this, its asks about the payment on account and, and you change the dropdown to "yes", you get this:
* indicates required information
Are you claiming to reduce your 2014-15 payments on account?* Help about: Claim to reduce payments on account - opens in a new window
Enter the reduced amount of your first payment below and say why you are making the claim.
Your first payment on account for 2014-15:£
Help about: Your first payment on account for 2014-15 - opens in a new window
Please explain why you are making a claim:* Help about: Why are you making the claim - opens in a new window
