Was Self-Employed, now PAYE again...Prelim Tax Q?

T

telecaster

Guest
Hi,

Would be grateful for a little information on how my Preliminary Tax return for 2008 will be affected by my return to PAYE employment.

I was self employed and self assesed from 2005 up to July 2008, and returned to PAYE work in August 2008.

My current Form 11 which declares my income for 2007 requires me to pay a preliminary tax for 2008. Is the best thing to do here to make a payment for 7/12ths of the 2007 liability - this being the 7 months of self-employment.

It would seem wrong to pay a full year's prelim tax while also paying paye for the last 5 months of 2008 as its essentially me knowingly overpaying the revenue.

thanks
 
I'd use the normal rules - either pay 100% of your last year's liability or 90% of this year's. If your liability this year (2008) is 7/12ths of what you would get in a normal year - just pay 90% of that actual amount, rather than paying 100% of total 2007 liability. But those are your only two options (unless you go for the direct debit option where you have to pay 105% of your 2006 liability in prelim tax)

Sprite
 
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