Answers to your taxing questions
As we work closely with our customers, supporting and guiding them, often a number of similar questions are asked.
Following on from our last column, when we presented the first batch of your questions, this week we will go through the rest of the most commonly-asked questions that we come across:
1) When do I pay my tax?
Self-employed or tax return only clients generally pay their tax by the 31st January following the end of the tax year (5th April).
If your tax bill is over £1,000 you will be asked to pay your tax bill in full and then half again ready for the next year. This is known as a payment on account.
If your bill is over £1,000 you will regularly pay 50% of your bill in January and the other 50% in July.
This can be a big shock the first year but, once you are in the pattern, it can help spread the cashflow.
Companies always pay their tax nine months and one day after their end of year, so 31st March year end companies must pay their tax on or before the 1st January following the end of year.
2) Can you get me a tax refund?
We frequently are asked this question. There are two parts to the answer:
a) You can only get a refund if you have paid or had any tax deducted.
b) If you have paid or had tax deducted we can look to see if the tax you have paid is more than the tax that should have been paid.
For this we would need to look at your overall income, and gains for the year.
3) I am selling a house – do I pay tax on this?
If you build a home and live in it personally you may not be liable to any tax on the sale of the property and profit made if it has been your principal private residence (PPR).
If you build a property and do not intend to live in it, or you have a main residence, you may be liable to pay tax on the profit made.
The profit made on a sale of a residential property (which is not your PPR) is calculated after deducting costs, including legal and estate agent fees. This profit is then used to decide if any tax is payable.
If any of these questions are something you feel you would like help with, please contact us and we will aim to help you get the right answers.