HELP! I've just had my first tax bill....

[Toomuchketchup]

And it's made me feel sick. I'm a regular poster but I just feel too embarrassed to post under my usual name.

At the end of January I'm expected to pay £2500 and there's no way we can afford it. I know I should have been putting money aside but it's been a really tough year for us. We've already had to borrow the last two months' mortgage from my parents and I really don't know what to do. I'm not even sure that the amount is correct, I did the self-assessment form but I'd calculated the tax as being a lot less.

If anyone can offer any advice I'd really appreciate it.

If you don't think it is correct, phone the revenue and ask them to go through it with you. They DO make lots of mistakes - have messed up both mine and my husbands this year (and my hubby is an accountant so he KNOWS it is wrong).
You should be able to - if you are PAYE - pay the amount outstanding through your tax code - so they'd reduce your tax free amount to take it over a number of months
HTH

Hi,

Why dont you see if you can arrange an appointment at your nearest Inland Revenue Accounts Centre.
They have just helped my mum re do hers after being in a similar situation to your self.
Her Tax was recalculated a lot lower than first billed for.

Good Luck

Butty.xxx

popmum, you can't add the overdue to your PAYE if you submitted your tax return after Sept.

Anyway, I suspect the whole point is that TooMuchKetchup doesn't pay paye.

TooMuchKetchup, do ring your tax office, and ask for an appointment, then take in your copy of the calculation. They should go thru' it with you.

In future, you really need to put 25% of everything you earn into a seperate account. So every time someone pays you - say £100 - you put £25 into that account, straight away. When your tax is due, you should find that you have more than you need. Use the surplus to pay off any bills, or (more prudent) pay that surplus into a pension fund.

Does your Jan31 payment also include a 50% payment on account of your anticipated 2005/06 liability? If it does and you expect your actual 2005/06 liability to be less then you can make a claim to reduce the payment on account.
I am assuming you are self-employed.

You will probably be able to come to a settlement arrangement with the Revenue - you will be better placed if you contact them to do this before your payment is due rather than waiting for the red demands.

Good point Roobie, I'd forgotten that the demand may include a payment on account for next year.

Thanks so much for all your advice.

Roobie, yes I am self-employed (freelance) and the bill does include payment for the next year although I'm pregnant so I'm going to be giving up work in April/May anyway so I'll definitely make sure I tell them that. I'll also make sure I call them as soon as possible about how and when I'm able to pay it.

Butty, I didn't know you could do that but I will try and make an appointment to see someone.

I knew it was a good idea posting on MN - thanks so much everyone.