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Posted Sun, 24 Apr 2022 11:52:08 GMT by Manuel Carrasco
Hi, I worked as self-employed from February 1st 2021, until October 1st 2021. I paid already my taxes for the 2020/21 tax year. I haven't yet completed my Self Assessment for the 2021/22 tax year. Also, I haven't told the HMRC that I stopped working as a self-employed. On October 4th 2021, I've started working as a full-time employee (ongoing). I'm no longer a sole trader and I won't be working in this way in the near future. What should I do (and in which order) to pay my 2021/22 taxes and let the HMRC know that I am no longer a sole trader? Should I first complete my Self Assessment for 2021/22 and then complete https://www.tax.service.gov.uk/shortforms/form/CeaseTrading or the opposite order? Best regards, 
Posted Mon, 25 Apr 2022 11:20:41 GMT by HMRC Admin 17

Hi,
 
If you complete the Self Assessment tax return, you can enter on the Self-Employment page the date you ceased Self-Employment and
when you submit the return we will update our records accordingly.

Thank you.
Posted Mon, 25 Apr 2022 12:47:13 GMT by Manuel Carrasco
Assuming that I won't work as a sole trader anymore, if I do what you suggest, next year I don't need to complete the Self Assessment. I mean this only regarding self employment taxes. Am I correct? Thanks for your help!
Posted Tue, 26 Apr 2022 10:44:00 GMT by HMRC Admin 19
Hi,

If that was your only Self Assessment criteria, then yes, you would not be required to do a return for 22/23 unless your circumstances change.

Thank you.
Posted Sat, 07 May 2022 18:09:37 GMT by Manuel Carrasco
Hi, I am continuing my original enquiry in this thread. During the 2021/22 tax year, I worked as self-employed, stopped (forever - no plans to resume this at all) and right after it, I started working as a regular employee (ongoing). My Self-Assessment calculations say that I must do a "payment on account for the 2022/23 tax year", which is a considerable amount of money. I think this number is assuming that I'll be continuing working as self-employed this current tax year, which is not true. On top of this, today as a regular employee, I earn less money than I was doing self-employed. Is it possible to avoid paying this "payment on account for the 2022/23 tax year"? How could I do so? Thanks a lot for your help so far.
Posted Tue, 10 May 2022 10:07:18 GMT by HMRC Admin 17

Hi,
 
If you have submitted your tax return, if you contact our Self Assessment department we can ensure that the Payments on
Account are reduced, and the Self Assessment record is closed.

You can reduce the Payments on Account online :

Understand your Self Assessment tax bill    .

However I would recommend contacting us to ensure that the Self Assessment record is closed :

Self Assessment: general enquiries    .

Thank you.
Posted Tue, 10 May 2022 11:31:50 GMT by Manuel Carrasco
Thanks for your answer. I just got two questions. 1) Can I ask for a reduced/zero payment on account before submitting my tax return? I haven't submitted one yet, I just filled all the data in the online form, but have not submitted it. 2) What do you mean by closing the Self Assessment record?
Posted Wed, 11 May 2022 11:54:51 GMT by HMRC Admin 17

Hi,
 
1) On the return after the calculation, there is a section where you can request to reduce the payments on account

2) if you have no Self-Assessment criteria following your Self-Employment ending, your record should be closed
to ensure we do not send a return for the following year.

Thank you.
Posted Thu, 12 May 2022 22:12:53 GMT by Manuel Carrasco
Thanks again for the detailed answer. Is this reduction usually complete (the total amount of the payment on account)? Now I am taxed at source (employed) and I earn less money than before. If it is just a partial reduction and I were overcharged, how do I claim this to be refunded? When? Best regards, Manuel.
Posted Fri, 13 May 2022 16:25:02 GMT by HMRC Admin 20
Hi Manuel Carrasco,

If you entered an end date for Self-Employment on the return then I would normally expect the Payments on Account to not be requested and the record closed.
Your tax going forward would be dealt with through a P800 tax calculation which we would only issue if you under or overpaid tax.

Thank you.
Posted Fri, 13 May 2022 17:00:18 GMT by Manuel Carrasco
Thanks for your answer. Yes, I entered an end date for Self-Employment in "If your business ceased after 5 April 2021 but before 6 April 2022, enter the final date of trading:". I entered 02/10/2021. Then, when I view my calculations, it says "First payment on account for 2022-23" and "Second payment on account for 2022-23 will be due by 31 July 2023" which are non-zero. Is there any way to double-check why I am still charged a payment on account if I included a ceased date? Thanks for your help! Best regards, 
Posted Mon, 16 May 2022 14:21:11 GMT by HMRC Admin 17

Hi,
 
Payments on account are calculated based on your previous years tax liability. 

If you know your tax bill is going to be lower than last year, you can ask
HM Revenue and Customs (HMRC) to reduce or cancel your payments on account.

You can do this either online, by telephone or by post.

See link:

Contact HMRC   .

Thank you.

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