When SKAT generates your advance statement, SKAT takes as its starting point last year's advance statement. SKAT calculates, for lack of better, that you will have the same B income in the coming year plus a smaller percentage adjustment. On the basis of this expected B income and other income, e.g. salary, an advance statement is then created, where the expected tax is either collected via A income (where tax is deducted automatically) or by issuing payment cards for B tax rates - up to 10 B tax installments in one year. Some taxpayers are registered for automatic payment via BS and do not receive payment cards, but instead must keep an eye on the monthly BS summaries. If your payments via SKAT's 10 payment cards must be correct and not give you a back tax (or charge too much tax), then several criteria must apply at the same time:

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·       your B income must be exactly the same as the previous year.

·       your deductions and depreciation must also be exactly the same as the previous year.

 

That is very unlikely!

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But it's not even done with that. The 10 payment cards from SKAT are also divided into 10 equal installments. Thus, both your fee income as well as your deductions and depreciation must also be distributed in 10 equal installments, if it is to fit with SKAT's payment installments. It is almost 100% unlikely that this would be the case.

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By following SKAT's method, you may thus end up having to pay one or more installments for one or more months, when you have no B income to pay with. Some fee recipients – including musicians – may very well have the vast majority of their income lying around Christmas. Then it may well be a little difficult to have to pay an installment B-tax in January, February, etc., if you have no income in those months.

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b-indkomst.dk is aware of an example where SKAT asked a B income recipient to set up an overdraft to pay B tax rates in months when he had had no B income.

At b-indkomst.dk we know that B-income can fluctuate a lot from year to year. And it is more the rule than the exception that your B income fluctuates over the course of the individual year. It is also very likely that your deductions and depreciation will change from year to year.

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Therefore, it is far too simple to do as SKAT does. This can very easily mean that you, as a B income recipient, end up with a problematic back tax. But, as mentioned above, it can also mean that you have to pay a B-tax installment with money you haven't earned yet - and therefore may not have at all.

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But don't worry - if you use b-indkomst.dk and follow our instructions, you always have 100% control over your B income, your deductions and depreciations and you also know exactly what you may owe in AM contributions and B tax.

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With b-indkomst.dk you thus have the full overview at all times. All it requires is that you keep your information up to date and enter your jobs, deductions, etc. when you have this information.

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b-indkomst.dk shows you exactly what you have to set aside for AM contribution and B tax - as you receive your fees, incur your driving allowance and all other deductions. And also corrected for the voluntary contributions to SKAT you make during an income year. Because if you can see that you owe a significant amount in AM contribution and B tax, and you are not faced with having to make a major investment that will trigger a correspondingly large deduction, then it may be a good idea to make a voluntary payment to SKAT.

Instead of SKAT's method, which is problematic in several areas, as mentioned above, we show below the method that we recommend. Among other things, it ensures consistency in relation to the fee recipient's income and ability to pay AM contribution and B tax. Note, where deductions, depreciation, etc. have also been taken into account. We recommend that you manage your B income as follows:

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1. Correct your advance statement so that you indicate that you do not expect to have any B income. You do this by writing 0 in box 210 "Fees and salary for civilian conscripts" in your advance statement. Then you avoid having to pay à conto payments to SKAT. The tax must of course be paid later. You can also choose to pay it as you receive your fee income.

2. If you have already paid á conto B tax (or made a voluntary payment of tax) to SKAT for one/several months, you must:

   • Enter the total amount you have already paid in advance in box 342 in your advance statement.

   • Enter the total amount on b-indkomst.dk on the "Tax" tab for the year in question. Then b-indkomst.dk includes this in the calculation of your expected tax payment for the year. Furthermore, REMEMBER to update the amount for your total payments of AM contribution and B tax at b-indkomst.dk on the "Tax" tab for the year in question each time you make a payment to SKAT.

3. Enter all your jobs, deductions and investments on b-indkomst.dk as soon as you know about them - this is super important! If you do this continuously, you can always see on the "Tax" tab what you should set aside for additional payment of AM contribution and B tax. b-indkomst.dk automatically deducts the payments you have already made via installments as well as any other voluntary B tax payments, as long as you remember to indicate these, as mentioned in #2 of this guide.

4. If you see on the "Tax" page on b-indkomst.dk that you owe money to SKAT and the amount is significant (e.g. more than DKK 10,000), then you should pay this amount as a voluntary payment. This is done very easily via SKAT's website. Remember, however, that deductions or a large investment can affect your tax liability, so if you know that, for example, you will soon have to make a large investment, you may have to wait to make a voluntary payment. If you make a voluntary payment of B tax, it is important that you remember to correct the amount for your total payments of AM contribution and B tax on b-indkomst.dk on the "Tax" tab.

5. Since SKAT attributes day-to-day interest to any residual tax from 1 January (in the year following the income year), it is most advantageous if you remember to pay your tax due BEFORE 1 January. But don't worry - you will receive an email from b-indkomst.dk when it is time to make a voluntary payment to SKAT. This way you avoid having to pay annoying interest - and you also don't have to remember when it is that you have to make a voluntary payment to SKAT. NOTE: If you unsubscribe from our emails, you will unfortunately not receive this - and other - important reminders.