Think about reducing your tax payments on account

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Hi

For many of you, your tax bill in January will also include the first payment on account for 2008/09. This is based on the 2007/08 tax bill (ie last year's profits), so if your profits for the current year are expected to be lower you can make an application to reduce your payment on account. If you reduce it too low you will pay interest on the shortfall.

HMRC's online system for requesting the reduction is broken and won't be fixed before 31 Jan so applications can be made by phone. The number should be on your statement or at HM Revenue & Customs : Office Locator (not all are there, but you may be lucky) .

You'll need your 10 digit UTR and NI number, so if you can get your statement in front of you when you call, you should have most of the info to hand. Useful, especially if there has been a typo with your address or you have moved without informing them of your new address.

Alternatively, the claim can be made in writing using form SA303 available at http://www.hmrc.gov.uk/sa/forms/sa303.pdf .

For those businesses hit by the credit crunch, it may be worth roughly calculating your estimated profit for the current tax year to see if it is worthwhile doing this.

If you haven't submitted your tax return online yet, you can make the application within your tax return. Some software won't accept NIL so you'll need to input 0.01 . I don't use the HMRC software, but this has been an issue in the past.

If you are using the HMRC software, bear in mind last year's system crash, so don't leave it until the last few days.

Regards

Keith
http://HRBS.biz