The UK’s tax payment system is unfortunately arranged so that payments of tax for the self-employed fall at the most inconvenient times, be it following the busy and always expensive Christmas period (31 January) or before your annual summer holiday (31 July). However, there may be something you can do to ease your cash flow planning...
If your income for the 2017/18 tax year is lower than that of the previous year, there may be an opportunity to reduce the amount of tax payable on 31 July. By completing your tax return before this date, it is possible to review your tax position and, where possible, adjust the amount you pay to HMRC.
For those whose income has increased, unfortunately there may be no scope to reduce the amount you have to pay. The 31 January tax payment is made up of a balancing tax payment for the tax year plus a payment on account for the following tax year, making it possibly the largest payment of tax you will make in any given year where your income has increased.
Completing your tax return early ensures you can fully benefit from tax advice as soon as possible. The last thing anyone wants to receive is an unexpected, large tax bill.
For more information, please get in touch.