Second payment on account

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    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

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