Tax Tips & Small Business Letters

Apply in June for reduction in July: The Taxman will be demanding money from those who had to make a payment on account for 2004/05 at January 31, 2005, and now need to make another one by July 31. You shouldn't automatically pay what the Tax Man asks for based on your tax bill for 2003/04. If you have evidence that your tax bill for 2004/05 is significantly lower than 2004/04 you have the right to apply to have the payment on account reduced in line with this. But hurry, you'll need to get this in before the end of July to get the amount you owe changed on the Taxman's computer to avoid him chasing you for missing amounts in August.

Small business letters: If you're self employed you may find you receive a letter from the Taxman. These letters are to "enable you to complete your tax return correctly" and pay the right amount. Of course these tax returns aren't due until January 2006, and you should complete your tax return as you normally would. The message in the letter is clear, failure to file your tax return on time and correctly will result in interest charges and penalties. An important note to remember is the expenses that you can deduct from profits. His FAQs may list some, but not all. If you're in doubt about an expense call HM Revenue & Customs.

HM Revenue & Customs