Half tax for current tax period due by end of January (for the first time)

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    Half tax for current tax period due by end of January (for the first time)

    Hello everybody,
    I've just done my self-assessment for 2019-2020 and for the first time I've been asked to pay in advance half the tax for the current tax period, 2020-21 (see below).

    My self-assessment is rather simple, I only have my job and 1 rental property and none of that has changed in the past 5 years.

    Is anything changed in terms of tax rules?

    Many thanks in advance for any info!

    From the HMRC Website

    Total Income Tax due ________________________________________________ £7,000

    Estimated payment due by 31 January 2021
    You must pay the total of any tax and class 4 NIC due for 2019-20 plus first payment on account due for 2020-21 by 31 January 2021

    (Note: 2nd payment of £3,500 due 31 July 2021)
    This amount does not take into account any 2019-20 payments on account you may have already made

    2019-20 balancing payment __________________________________________ £7,000

    1st payment on account for 2020-21 due 31 January 2021 ____________ £3,500
    Total due by 31 January 2021 ________________________________________ £10,500

    #2
    Yes, there has been a change in how HMRC are collecting tax.
    The request for advance payment on account is now standard.

    I don't know if the regulations themselves have changed, but it's been like this for me for a few years and seems to be being rolled out more widely.
    To be honest, as I set aside an amount each month to cover the tax, it hasn't made a lot of difference personally.
    When I post, I am expressing an opinion - feel free to disagree, I have been wrong before.
    Please don't act on my suggestions without checking with a grown-up (ideally some kind of expert).

    Comment


      #3
      About 4 years ago, the mortgage interest was no longer fully allowed expense against rental income. This causes some landlords in 40% tax bracket to pay more tax on rental income. It becomes more noticeable when the advance payment for current year tax is demanded.

      Comment


        #4
        Look out for 'Making Tax Digital' which will require us to pay quarterly - introduction coming shortly (although it keeps moving back!).

        Given that you have nearly a year to pay the tax on your profits you can see why HMRC wants you to pay half of it early!

        Comment


          #5
          This happened to me for the first time this year, and I am a landlord living abroad. I spoke to HMRC , they offered to lower the 2 part payments , but said if i ended up owing more, then they would penalize me, but if i ended up owing less , they give it back plus interest. i went with the second option

          Comment


            #6
            I save money each month in my premium bond account for my tax ....

            Comment

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