Self employed - do I need to make payment on account in these circumstances?

jennifernil

No, you are no doubt correct. I was just thinking that as the OP did this work freelance(in the current year) she presumably billed them so it's still part of her SE income for 10/11, so the tax they deducted is like an advance payment for 10/11.

It kind of makes sense! To me anyway!

Are the POAs not supposed to add up to cover your liability for the year as estimated by either HMRC or yourself? 50% paid during the year (31/01) and the other 50% in July.

I am just comparing it in my mind to the overpayment OH had left from his POAs for 09/10. When he rang HMRC to reduce his POAs for this year, he asked them to refund the overpayment, but they said he should just deduct it from his first POA. Not the same I know, but........

zygurat789

Mikeyorks wrote: »

But the £2200 relates to 2010-11 PAYE? So it's sitting on a P45 / P14 somewhere. And it was deducted in accordance with the PAYE Regs. So I can't see any read across to the POAs due this coming year.

The £2200 only comes into play when amalgamated into the 10-11 SA Return in Jan 2012. At that point it both affects the overall liability under SA and also has potential influence (the 80% rule) on the POAs for the subsequent year.

But I can't see how it can possibly be regarded, in advance, as any sort of payment in advance. As it's 'ring fenced' as current year PAYE?

When the OP does his 2010/11 calculation he should find that because, he has had a bad debt and some of his normal invoicing was diverted to PAYE earnings, his SE earnings are reduced and hence his tax liability is reduced. It is 50% of this liability which was due Jan and Jul 2011 as POA.