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can anyone advise on whether we'll get a reduction in tax bill because DH has taken a permanant job

(7 Posts)
meemar Thu 30-Oct-08 10:32:58

DH has been self employed for about 3 years but decided to take on permanent employment in September this year.

We have a tax bill of around £2000 due on 31st Jan which is the first payment on account for 2008/09.

Because he will only have been self employed for 5 months of this tax year and is currently paying tax and NI on his salary, do we still have to pay all of this and then get it refunded, or can we get it reduced in advance?

Anyone have any experience in what to do? I'm trying to avoid going through the accountant and sorting the tax myself this year to save money.

Thanks in advance.

MrVibrating Thu 30-Oct-08 18:56:48

You can get the payment on account reduced to half of the tax that will be due on self-employment for 2008-9. If you do self-assessment on line, log in and you will find a link (look for 'reduce my payments on account for 2008-9').

The paper version of the form is here.

MrVibrating Thu 30-Oct-08 18:57:11

You can get the payment on account reduced to half of the tax that will be due on self-employment for 2008-9. If you do self-assessment on line, log in and you will find a link (look for 'reduce my payments on account for 2008-9').

The paper version of the form is here.

meemar Mon 03-Nov-08 11:43:43

Thank you for the link, it looks helpful.I'll get DH to talk to his local tax office too, because I can't see it mentioned anywhere about stopping payments on account altogether, which is what we need to do really.

MrVibrating Mon 03-Nov-08 12:07:35

To stop payments on account you simply apply to reduce them to nil, but in January and July 2009 you will still need to pay 50% of the tax and Class 4 NI on the 5 months of self-employed earnings - or was there no profit in this period?

meemar Mon 03-Nov-08 15:21:52

MrV, there was profit but very minimal - A lot of DH's income was taxed at source as he was mainly subcontracting, so that could possibly cancel out tax he is liable to pay.

I'll get him to call them and find out how to do this.

Thanks for the advice.

Eddas Mon 03-Nov-08 20:20:54

meemar, if there will not be a liability, you just need to fill the form in and reduce the payments to nil.

Make sure you complete the return asap after the tax year finishes to get home taken off the self employed list so that HMRC stop sending him returns to file.

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