There’s a silver lining to the financial turmoil, says Theresa Hunter in The Sunday Telegraph – lower tax bills. But don’t “bury your head in the sand” or you may remain oblivious to the fact that you’ve paid too much and never claim it back. First in line for a rebate will be those who lose their jobs, followed by the self-employed or higher-rate taxpayers, who may have paid too much tax via the ‘payments on accounts system’.
If you are a PAYE employee and lose your job, make sure you are refunded any unused personal allowance and haven’t paid too much higher-rate tax. If you are self-employed, you will be due to pay the first ‘payment on account’ for 2008/2009 (half the tax paid in the previous year).
But tax experts advise taxpayers not just to pay this sum, but to take a realistic look at what their earnings and dividends are likely to be by the end of the tax year. If these have dropped, you should apply to make a lower payment by downloading form SA303. And, if you run a small firm and have made a trading loss, remember you can carry the loss back to the previous year and get a tax rebate.