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Sleepless
Nights for Self-Assessed
 With
the introduction of self-assessment the responsibility of
calculating tax liability has shifted from the Inland Revenue
to the individual, and for many this has become another worry
where the British economy is already forcing sleepless nights
for those in business.
For
those who were confused by the old system, it is perhaps
a blessing in disguise. With one assessment and one tax
office for all sources of income, tax liabilities can now
be projected as far as 33 months in advance. This will be
important for cash flow projections. If your business is
increasing it’s
profits, a ’catch-up’ payment
is required at 31st January 2008 in addition to your payment
on account for next year. Don’t be caught
out.
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Now, the responsibility for paying
tax lies with the taxpayer. If you fail to make the correct
payment by the correct date, interest and surcharges of
5% will be charged. These surcharges can be avoided by
making arrangements to spread payments.
If you have not submitted your tax
return to the Inland Revenue by the 30th September, you
will have to calculate your tax liability yourself by
following the instructions enclosed with your tax return,
a challenge soon to be included in the ’Krypton Factor’!
Alternatively, a good accountant
should be able to calculate your tax liability for no
additional cost, and provide you with a summary of all
key dates and payments.
Whatever you decide, don’t be one of the people
who
still need to submit a tax return for 2005/2006 and who have
now incurred penalties of at least £100.
For 2005/2006 penalties will be charged from 1st February
2007 .
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