Second payment on account

Collapse
X
 
  • Filter
  • Time
  • Show
Clear All
new posts

    Second payment on account

    Hello all,

    After paying my 2017/18 tax bill I was asked to pay the first payment on account for 2018/19. The first payment was due by the 31st July 2019. This payment goes towards my future tax bill.

    I paid that money owed by the deadline but it hasn’t reduced my 2018/19 tax bill. Do I have to submit my return first and then my bill is recalulated?

    Many Thanks

    #2
    Thanks for your reply.

    So my first payment on account due on the 31st January 2019 was the deadline for payment for the previous tax year.

    I thought once I made the second payment on account it would automatically show as being made and reduce tax without submitting my 2019 return

    Comment


      #3
      Each tax return is a separate thing. Imagine that there is a completely separate accountancy exercise going on by which you pay for this stuff.

      You will be best off buying some decent tax software. It will do all of these things for you and carry over the payments for the amounts carried forward, and complete the relevant boxes (electronically for you). You still need to understand the basics of the way the tax works however.

      Comment


        #4
        Originally posted by dotcotton999 View Post
        I thought once I made the second payment on account it would automatically show as being made and reduce tax without submitting my 2019 return
        The whole idea of payments on account is that they guess that you will owe a similar amount of tax the next time around. So effectively they want the tax in advance. Until you submit your 2019 return they have no idea, so there is nothing to reduce against.

        If (in theory) your 2019 tax return was identical to the 2018 one, the two payments on account would nearly exactly offset the required 2019 payment, but then you would have to repeat the exercise again.

        Comment


          #5
          It's not that they want the payment in advance, but rather that they want the payment close to when it actually accrues. It still gives you an average of six months credit, if the income accrues to you evenly, as does rent.

          Comment


            #6
            After submitting your tax return for 2017/18, you get a bill to pay the tax for 2017/18 by 31 Jan 2019.
            if the tax bill is more than £1000 , then you will be ask to pay the 1st Half tax bill for 2018/19 by 31 Jan 2019 and 2nd half by 31 Jul 2019. ( Tax office assumes your income for 2018/19 will be same )

            To get any adjustment for 2018/2019 , you must submit a 2018/19 tax return before 31 Oct 2019 ( paper ) or 31 Jan 2020 ( online ) and get a statement around Spring 2020.

            Comment


              #7
              Great many thanks all for your help

              Comment


                #8
                Evening all I’m revisiting this old thread regarding payments on account.

                I’ve submitted my 2019 return and I’m aware I have to pay what I owe by the 31st Jan 2020. Because I made a payment last year towards my 2019 return when will this show up and reduce what I owe?

                Thanks

                Adam

                Comment


                  #9
                  It should already show up, but on your tax account, not your calculations.

                  Comment


                    #10
                    Evening thanks for your reply...the money I paid last year is showing in my account. But the money I owe for the 2019 tax year hasn’t taken the credit in my account into consideration

                    Thanks

                    Adam

                    Comment


                      #11
                      You have to do that calculation when working out the balancing payment. https://www.gov.uk/understand-self-a...nts-on-account

                      Or just overpay and wait for the repayment.

                      Comment


                        #12
                        https://www.gov.uk/understand-self-a...ount-last-year seems to confirm that you have to work this out yourself.

                        Comment


                          #13
                          You may get a statement about 6 weeks after your payment due on 31 Jan 2020.

                          Comment


                            #14
                            Can anyone provide clarification please?

                            Thanks

                            Adam

                            Comment


                              #15
                              HMRC can provide clarification, although I'm not sure what is not clear.

                              Comment

                              Latest Activity

                              Collapse

                              • Sdlt on gifted property
                                by Bill31
                                My father gifted me part of property we live in together, its our main residential property. There was no money exchanged and theres no mortgage.
                                I know theres no cgt and sdlt to pay on this gift. But do we still need to file a sdlt rdturn to hmrc?...
                                04-06-2020, 12:29 PM
                              • Reply to Interest expense on tax return - how to obtain?
                                by jpkeates
                                Do you have a question?...
                                04-06-2020, 11:34 AM
                              • Interest expense on tax return - how to obtain?
                                by leasee123
                                I will be filling out a 2019/20 SA tax return (my first time!) and will need to declare the income from my buy to let property. The property is on a residential mortgage as it was my home but since last year I have let it out with my lender's permission. I was and continue to be a basic rate tax payer...
                                02-06-2020, 15:01 PM
                              • Reply to Interest expense on tax return - how to obtain?
                                by Pol42
                                Arrangement fee on fixed buy to let mortgages & tax
                                04-06-2020, 10:37 AM
                              • Reply to Interest expense on tax return - how to obtain?
                                by JamesHopeful
                                Thank you for clarifying -- my wording was perhaps a bit unclear. When I said "everyone (whether their marginal tax rate is at basic, higher or additional rate) continues to report mortgage interest in the same way", I meant that there haven't been separate reporting systems introduced depending...
                                03-06-2020, 11:13 AM
                              • Reply to Interest expense on tax return - how to obtain?
                                by leasee123
                                Thanks so much jpkeates for clearing that up. Just so I completely understand - say I left the property instead one day prior to the start of the let - i.e. 31st May, would I report the interest paid on the mortgage on 15th May or does it instead start from 15th June? I am pretty sure it is the former...
                                03-06-2020, 11:12 AM
                              • Reply to Interest expense on tax return - how to obtain?
                                by jpkeates
                                If you're reporting on the cash basis, you record the costs as having been incurred when they happen.
                                So no accrual is needed.

                                The exception to the costs being recorded as incurred is interest between when you moved out and when the first tenancy began.
                                As you're working on...
                                03-06-2020, 10:58 AM
                              • Reply to Interest expense on tax return - how to obtain?
                                by leasee123
                                Thanks for all the replies, much appreciated. I am still confused however as to what interest to report in the tax return. The property was let for the first time last year say 1st June after having lived there myself for a number of years until end of April last year. My mortgage is paid monthly...
                                03-06-2020, 10:54 AM
                              • Reply to Interest expense on tax return - how to obtain?
                                by jpkeates
                                Just for the avoidance of doubt, the way the interest is reported does actually change.

                                Allowable interest (while in the transition period) is recorded as such (in Box 26) and the restricted element goes in a separate entry (Residential finance costs not included in box 26).
                                The allowable...
                                03-06-2020, 10:52 AM
                              • Reply to Interest expense on tax return - how to obtain?
                                by JamesHopeful
                                To be clear, everyone (whether their marginal tax rate is at basic, higher or additional rate) continues to report mortgage interest in the same way, and it is treated in the same way for tax purposes. It is just that new way in which it is treated (as a tax reducer of 20% of the interest rather than...
                                03-06-2020, 10:23 AM
                              Working...
                              X