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If you complete a Self Assessment Return it will be for a tax year ending on 5 April. The 2002 Returns issued 6 April 2002 are for the year to 5 April 2002. (If you were sent a 2001 Return and have not submitted it, you almost certainly need our help to minimise your penalties, surcharges and interest - it will not go away without action on your part!)
For income such as interest, dividends, rent, pensions and employed earnings the amount to be reported is for the year to 5 April, but for business accounts it is the year ending within the year to 5 April 2002, i.e. an accounting year ending between 6 April 2001 and 5 April 2002.
When you start a new business (see also Start Up Advice), you can select any date as your business year end. 31 March is an appropriate date for many businesses but other dates can be beneficial in some cases.
If you completed a 2001 Return, you may have had a liability to pay. If that liability exceeded £500 you would also have been asked to pay one-half of that liability as a payment on account for the year to 5 April 2002 by 31 January 2002, and a further one-half of that liability as a second payment on account for the year by 31 July 2002.
If you did not have a business and did not complete a 2001 Return, you will not have made any payments on account for the year to 5 April 2002.
The first payment on account is demanded 10 months into the tax year, and the second 4 months after the end of the tax year, so it is untrue to say the Revenue are demanding tax before the income has been received.
The balance of your liability for the year to 5 April 2002 is due on 31 January 2003. This is the same date that you will be required to pay your first payment on account for the year to 5 April 2003.
Example figures for a taxpayer whose first Self Assessment Return is for the year to 5 April 2001 could be -
| Year to | Year to | Year to | Total | |
| 5/4/2002 | 5/4/2003 | 5/4/2004 | payable | |
| Payments due | ||||
| 31/1/2002 | £ nil | £ nil | ||
| 31/7/2002 | £ nil | £ nil | ||
| 31/1/2003 | £1,200 | £600 | £1,800 | |
| 31/7/2003 | £600 | £600 | ||
| 31/1/2004 | £2,000 | £1,600 | £3,600 | |
| 31/7/2004 | £1,600 | £1,600 | ||
| 31/1/2005 | £50 | £50 + | ||
| -------- | -------- | -------- | ||
| Total liability for tax year | £1,200 | £3,200 | £3,250 |
Note how the £2,000 increase in total tax liability between the first two years causes a high increase in tax payable at 31 January 2004. It is important to budget for changes in tax payments when profits are increasing.
See also Self Assessment for details of penalties on late payments.
Reminder - disclaimer applies. Please feedback your comments. This page was last modified 16 March 2002