Saturday, 22 June 2013

How to Ensure ‘PAYE’ doesn’t make you Pay More Tax

Tax calculation is a major nightmare for if the recent HMRC report is to be believed; there have been about 2 million people who’ve ended up paying more. If that’s a sorry state of affairs then there’s even worse to follow. About 3.5 million have actually paid less tax due to PAYE miscalculations and the like. How is this tax deficit to be made up? The HMRC has a fairly simple policy, whatever tax you owe will be deducted from you this year. Hence, no matter how well you planned your tax returns or budget, you will have to now make allowances for paying more tax than you planned. Taxing isn’t it?

Given the fact that nowadays it is not so difficult to find accountants in London and the surrounding area, most people have opted for hiring accounting services. Even individuals have caught on the cheap accounting services trend, not to forget large and even small businesses. Any miscalculation in tax returns is bound to lead to a loss of time and money. Therefore, it is advisable to entrust looking after the accounts to those who have expertise and experience in it. PAYE has multiple aspects in it, which the layman may not be well versed with as is indicated below:

  • Submission of right documents within the stipulated time – thus, employing accounting services will save time and worry
  • Getting wage slips accurately ready
  • Ensuring the correct Payroll scheme is selected
  • Dealing with aspects like statutory sick pay, statutory maternity pay, redundancy and the like

  • Employees generally assume that whatever amount of tax is being paid through PAYE is the right amount. The shock comes in when they realize that their employer was deducting more or less. In the case of paying less tax, the burden generally increases on the employee who is forced to meet extra tax payments in the next financial year; and these are unplanned for expenses. Thus, cheap accounting services are a must for individuals as well as businesses.

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    1 comment:

    1. Tax calculations are never easy for the layman. Thus, it indeed is wiser to be safe than sorry!