Do you know your personal tax bill?
Benjamin Franklin – “in this world nothing can be said to be certain, except death and taxes”
At Perrys we aim to provide our clients with the most time possible to prepare for their personal tax payments to HM Revenue & Customs.
The self assessment system requires taxpayers to pay their outstanding tax and national insurance by the 31st January following the end of the tax year.
The main reasons for having a personal tax bill are:
Being self employed
Being a partner in a trading partnership
Having rental profits from land or property
Being a higher rate taxpayer
Receiving dividends over £5,000
In the tax year to 5th April 2017 the government introduced a new tax on dividends for those receiving more than £5,000 in dividends. This applies for both basic and higher rate taxpayers. The rates are either 7.5%, 32.5% or 38.1% depending on other earnings.
This new tax means that company directors receiving packages of salary and dividends may find themselves having a personal tax bill for the very first time on 31st January 2018. If that bill is over £1,000 they will also be required to make payments on account for the next tax year by 31st January.
HM Revenue & Customs presume the next year’s tax bill will be the same and therefore the tax payment will have an additional 50% added to it. You will then have to pay the second 50% by 31st July 2018.
If you feel you need more information and greater clarity on your personal tax bill please contact your local Perrys branch.
Article written by Doug Shanks