Why if you are ....?

Question

self employed do you have to pay your tax in advance ?

Answer 1

You fill a self assesment tax form out at the end of the tax year - i.e. you are paying ~1 year in arrears. An accountant will advise you/fill out your forms for you and help claim allowable expenses to reduce your tax bill.

Answer 2

???. never heard of that, are you sure?

Why not post up a reference so we can see what you are talking about.

Answer 3

You don't really pay tax in advance.

If you are employed you pay tax at the end of the month on what you earned in that month.

If you are self-employed you used to pay your tax for the whole year months after you had received it. Instead now you pay in instalments to  makes it a little fairer and of course so the Revenue can collect it earlier and gain any interest on it.

For the tax year ended April 2008 you will pay your tax in 2 instalments. One by 31 Jan 2008 (you will have earned 9 months worth by then) and one on 31 July 2008. These payments are based on the prior year earnings (ie: year ended April 2007). You will then make a balancing payment by 31 January 2009.

Answer 4

You pay every quarter.Miss one and you are in deep trouble.

Answer 5

Because you don't have an employer taking it out and sending it in for you throughout the year.

Answer 6

I think you are talking about payment on account under Self Assessment.

Well, you get a bill for the year to pay. If this amount is over £500, then the system estimates that you will pay roughly the same next year. So you have to pay the bill due, plus half of it in Januray and the other half July for the next year. If it turns out that you owe more tax, they will only ask for the difference. If you owe less tax or zero tax, then you will have a repayment due.

Answer 7

in you are employed you pay tax at every pay period.  If you are self employed you pay tax on 31 Jan (during the tax year) and 31 july (after the end of the tax year) and then the balance on the following 31 Jan (which is some 9 months after the end of the tax year).........you are not paying in advance.