1. Home
  2. UK Finance Discussions
  3. 60 pound tax refund to compensate 10% taxpayers.

60 pound tax refund to compensate 10% taxpayers.

There's an article on the BBC website:

formatting link
about the 60GBP refund for (some) tax payers this month to compensate for the 10% band going.

But there's one bit I don't get:

"Self-employed taxpayers will not feel the benefit until they start paying tax from January 2009."

Surely self-employed taxpayers have been getting the benefit from the instant it was originally announced. They've had to put less tax aside to pay the tax bill than they would otherwise have needed to do.

I could understand if it said January 2010 - because the payments on account are calculated based on last years profit. I've no idea what happens to that calculation if the basic allowance changes like this one has. Are all payments on account recalculated or does it "wash" in the balancing payment in Jan 2010?

Tim.

Reply to
google
Loading thread data ...

For some tax-payers, the change could enable, or enhance, a reduction in the POAs due on 31/1/09 and 31/7/09.

Reply to
Martin

Thanks. So in the absence of the taxpayer doing anything to request a reduction of their POAs, self employed taxpayers will feel the benefit when they make their balancing payment in January 2010. That makes sense.

Tim.

Reply to
Tim Woodall

Payments on account are calculated based on last year's tax bill. The basic allowance changes by a little bit every year (except one year when it was frozen), and the POAs are never adjusted for it.

Reply to
Jonathan Bryce

BeanSmart website is not affiliated with any of the manufacturers or service providers discussed here. All logos and trade names are the property of their respective owners.