PAY THE TAXMAN EARLY?

With the substanial uncertainty in the financial markets a number of clients have asked about paying their tax early in order to remove surplus cash above the FSA protected levels from their deposit accounts with UK banks.  There have also been some articles in the media suggesting paying early is a good idea (and over-paying). 

To be fair, it is always possible to overpay your tax, or to pay it early.  In general, clients doing this should anticipate no interest from the Crown, except if they are a large company paying tax under the corporation tax instalment regime or if they wish to acquire a Certificate of Tax Deposit - something we've not seen used by clients for many years.

However, in some limited circumstances, overpayments of corporation tax can generate interest at up to 4.75% at current rates. 

Whilst we would not ordinarily encourage clients to overpay their tax or to pay it early, if you wish to pay early please contact your usual office contact.  We can help with estimates, forecasts and advice on interest that might arise (if any) as well as providing a payslip or electronic transfer details.

Regards

Donald Parbrook

Tax Partner