Payment on account?
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sprucegs
Posts: 48 Forumite
in Cutting tax
Hi
I'm doing my first tax return for the year April 16 to April 17. I don't owe any tax because I only made 5k and my allowable expenses were roughly £100. Therefore I don't need to pay any tax or national insurance? However...I have opted to pay national insurance for the year anywayto keep me covered. So my tax return 'summary' says Total amount due for 2016 to 2017 is £X.
Then it also says about payment on account?? What does this mean? It has £0 next to both first payment 2017 to 208 and second payment 2017 to 2018 which is due by 31st July 2018. Is this correct?
Apologies for the basic questions!
I'm doing my first tax return for the year April 16 to April 17. I don't owe any tax because I only made 5k and my allowable expenses were roughly £100. Therefore I don't need to pay any tax or national insurance? However...I have opted to pay national insurance for the year anywayto keep me covered. So my tax return 'summary' says Total amount due for 2016 to 2017 is £X.
Then it also says about payment on account?? What does this mean? It has £0 next to both first payment 2017 to 208 and second payment 2017 to 2018 which is due by 31st July 2018. Is this correct?
Apologies for the basic questions!
0
Comments
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A payment on account is exactly that - a payment on account before a tax return is submitted.
HMRC essentially predict that your tax bill next year will be similar to your most recent tax bill, so ask for payments on account in July and January to be paid against it. As your tax bill is £0 then your payments on accounts are also £0.
Lets say your tax bill was actually £10,000 for 2017
This means you'd have to make a payment on account of £5000 in Jan 18 and £5000 in Jul 18, so what you have done is paid £10000 towards your next years tax bill.0 -
Okay thank you! So what happens if my tax year April 2017 to April 2018 I need to pay tax? Then hmrc will probably ask for payments on account for the following years tax return? But because my tax return April 2016 to April 2017 I'm paying no tax, on this occasion I don't need to pay payments on account.0
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Okay thank you! So what happens if my tax year April 2017 to April 2018 I need to pay tax? Then hmrc will probably ask for payments on account for the following years tax return? But because my tax return April 2016 to April 2017 I'm paying no tax, on this occasion I don't need to pay payments on account.
Correct. So if you owe tax on your April 18 return, you will need to pay this by Jan 19 along with a payment on account towards your April 19 return.
So if you owe £2k in tax next year. You will have to pay £3k (£2k liability + £1k payment on account) by January 19.0 -
Chucky1234 wrote: »Lets say your tax bill was actually £10,000 for 2017
This means you'd have to make a payment on account of £5000 in Jan 18 and £5000 in Jul 18, so what you have done is paid £10000 towards your next years tax bill.
This years tax bill. Payments on account are payments towards your estimated tax bill for the current tax year.0 -
Ok and hmrc calculate this? So there is nothing I need to pay for the moment because my April 2016 to April 2017 (what iam doing a self assessment on now) is below the tax threshold and I have opted to pay class 2 ni. So for this year April 2017 to April 2018 hmrc have predicted I won't need to pay any tax for this year and therefore are not charging me for payments on account. Have I got this correct?
Thanks.0 -
You have it correct but come back to us when you do get a tax liability!0
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Haha yes!
One more question.....I have saved it and printed off my copy, when do I have to submit and pay? Can it now be left until January? Obviously I won't be doing that but just wondered if it can be left for a couple of weeks?
Thanks.0 -
It should be saved as you go along and still there later - you have until end Jan 18 to press the submit button. (though I've never left it that long)0
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Ok thankyou.
One thing I have noticed, is when I printed off my saved version, it is different to the one I completed online. Therefore some boxes are blank because I wasn't asked to to 'X' them? Most of my return is blank, because it doesn't apply to me, it just seems a lot of pages for nothing on them!0 -
Hi
I'm doing my first tax return for the year April 16 to April 17. I don't owe any tax because I only made 5k and my allowable expenses were roughly £100. Therefore I don't need to pay any tax or national insurance? However...I have opted to pay national insurance for the year anywayto keep me covered. So my tax return 'summary' says Total amount due for 2016 to 2017 is £X.
Then it also says about payment on account?? What does this mean? It has £0 next to both first payment 2017 to 208 and second payment 2017 to 2018 which is due by 31st July 2018. Is this correct?
Apologies for the basic questions!
how much did it calculate for your total NI?0
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