Reducing payments on account

emmathe37th

Hi all,

My profits last tax year(11/12) were higher than I am expecting for this tax year.
On 31st Jan, I owe £775 balancing payment for 11/12 which is fine.
However my first payment on account for 12/13 is £1000. I want to bring it down to £800, as this is just a bit higher than what I should end up owing for half of tax year 12/13 (I know there is interest charged if I reduce it too much).

My question is, can I apply tomorrow to reduce my payments on account, then pay less in total on Jan 31st? So in total pay £1575 instead of £1775? I know there are fines for not paying your tax on time,but does this apply to my payments on account too?

Hope that makes sense! Cheers for any advice :-)

dtaylor84

You have to pay your payments on account on time or you will be charged interest (but not penalties).

If you apply to reduce your payments on account, you obviously(?) only have to pay the reduced payment on account on time.

If it turns out your reduced payment on account is too small, you will again be charged interest on what you should have paid. (And can potentially be charged a penalty if you were negligent or fraudulent: http://www.hmrc.gov.uk/manuals/salfmanual/salf303.htm#IDABXAME)