The rising domestic fuel bills combined with income tax payments will make January 2023 an incredibly tough month for those who are self-employed. If you are self-employed and worried about the upcoming tax bills, there are two things you can do to help.
Our Tips For Preparing For The 2023 Tax Bill
Our first tip is to finalise your tax return for 2021-22 as soon as possible; this will give you a clear outline of how much tax will be payable by the 31st of January 2023. Our team can guide you through this process and help you to forecast your cash flow, allowing you to determine how much money to put aside each month to cover bills.
If you feel that the best route would be to pay a weekly percentage towards your tax bill, it is possible to set up a Budget Payment Plan with HMRC. To be eligible, you must:
- Be up to date with your tax payments (any due by the 31st of July must be paid)
- Not have a Time to Pay arrangement in place to cover old tax debts
Your Budget Payment Plan can be set up online and will require direct debit payments to HMRC to be agreed upon. Unfortunately, we do not have the authority to do this on your behalf, but we can guide you through the process while you do it yourself.
The second tip is to reduce your tax payments on accounts for 2022-23, the first of which will be payable by the 31st of January 2023. To do this, we will need to forecast what your profit will be at the end of the current year. If this is likely to be less than the profit made in 2021-22, the payments on accounts can be reduced.