Tax Return Payment on Account

TWR88

Im self employed and have just done my tax return, I've been asked to pay 50% of my balance this year as payment on account (presumably for next year), this is to be paid along with this years balance by Jan 2010. The remaining 50% is the be paid by July next year.

I am certain not to earn as much next year as I did this year. I am a university student and am just finishing a 1 year paid internship (on top of my self employment) but next year its back to uni so I wont be earning anywhere near as much. I would therefore rather not pay the payment on account. I'll give HMRC a call on Tuesday but just wondered if anyone has had any experience of this? Is it possible to get out of?

Tarasam

You can reduce your payments on account as far as you like BUT if your tax liability shows you should have paid them then HMRC WILL charge you interest from the date at which the payment on account was originally due.

Best option is to do your tax return now then you'll know the exact situation.

Mikeyorks

TWR88 wrote: »

Is it possible to get out of?

Yes the POAs are on account of the anticipated sum for the following year. To reduce, you complete an SA303 :-

http://www.hmrc.gov.uk/sa/forms/sa303.pdf

...... either on paper or you can do it online if you're registered? But don't overdo the reduction .... otherwise you'll be charged interest right back to the original due date .... if your next Return shows more tax was due.

kellyshay wrote:

Best option is to do your tax return now

..... only just done? It's next year's POAs that are being queried.

TWR88

Thanks for your help both, looks good.

Money_Grabber13579

If you can show that it is likely that your income will have sufficiently reduced so that you don't have to pay POA, then HMRC will agree not to force you to pay them.