Could you have an unexpected tax bill?
Posted on 1st August 2021
This reminds us of a client we recently helped.
We were helping them to submit their P11D for a company van that they use personally. Van and fuel benefit generally goes up each year and, for the 2020/2021 tax year, this worked out to be £4,156. Once submitted, we then entered this information into the tax software we use, which - rather helpfully - links with HMRC to pull through employment income.
After taking a look at our client's draft tax position, we could see that there was a significant liability - circa £3,500. In previous years, the client had been fortunate enough to receive a refund. However, as the van and fuel benefit is classed as additional income and this had not been taxed - along with some other income - this had become a liability.
Acting fast, we contacted our client to make them aware that - subject to verification - the information that our system had pulled through showed they would have this liability.
We are sure the client in question wouldn’t mind us saying that they usually complete their return later into the year. Had this been the case for this particular tax year, they may not have been in a position to pay this.
By getting your unexpected tax bills sorted earlier in the year, it allows you to plan for any liabilities and avoid that dreaded feeling on 31 January.
Could this problem apply to you and would you like to check to avoid a last minute panic? If so, we we need to chat. Plan and react accordingly, with no nasty surprises. Call the Abaqus team on 01452 596765.
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