As a director of a Limited company you will be asked to complete a Self Assessment Tax Return. This return will calculate your overall tax liability, based on all sources of income and will give credit for any tax that has already been paid and deducted at source. Any balancing tax liability will be due by 31 January following the end of the tax year to which it relates.
If your balancing tax liability is over £1,000, HMRC will ask you to make a Payment on Account of the following year's liability. If asked to make such payments, these will be due by 31 January and 31 July. Each payment is half of the tax due for the previous year.
No payments on account are required in respect of capital gains tax liabilities or Student Loan repayments.
Payments on account will not be necessary, even if your liability is in excess of £1,000 if more than 80% of your tax is collected at source.
If you know that your income for the current year will be lower than last year's, you can ask to reduce your payments on account.
You can reduce your payments on account in any of the following ways:
Make a claim on the calculation pages of your tax return
Sign on to HMRC Online Services and make a claim online
Download, complete and send form SA303
If you do ask to reduce your payments on account beware:
If you pay less than you need to, HMRC will charge you interest
HMRC may ask you to pay a penalty too if they think you haven't taken reasonable care in requesting the reduction
For more information please contact one of our dedicated and friendly contractor accountants at who would be more than happy to help with any queries you may have on 01296 468 185 or email accountancy@orangegenie.com
Why Orange Genie Accountancy?
Orange Genie Accountancy offers fixed fee accountancy packages to contractors and freelancers. Each client has unlimited access to their own dedicated approachable and friendly accountant. All Orange Genie Accountancy accountants are specialists in the contracting market, so they can give you bespoke, high quality advice.
We will always keep you informed about anything that could affect you and your company. Our relationships with our clients are extremely important to us so we'll be in touch often, whether it be face to face, over the telephone or email.
Our packages start at £75 + VAT a month for an online service. Our most popular package is £120 + VAT a month which provides you with your very own dedicated accountant as well as:
Unlimited accountancy support
Face to face meetings so we can get to know you and understand your contracting goals
Proactive contact
Director and employee payroll
Annual Return
Self-Assessment Return
A fully compliant service so you are safe in the knowledge that you are meeting your legal obligations
And much more, including access to wealth management advice, IR35 reviews and pensions planning.
If you would like to appoint Orange Genie Accountancy as your accountants please either fill out our enquiry form or give one of our friendly expert accountants a call on 01296 468 185 or email accountancy@orangegenie.com.