Self Assessment - Payment on Account

oysteroyster

Hi everyone.

I understand (partially) how the Payment on Account (POA) system works - I pay next year's predicted tax liability in two parts the year before - but what I don't understand is how this is deducted the following year.

I'm currently filling out this year's tax return online and I don't appear to have come across anything that asks me to state what I paid on account last year. Therefore, I presumed this would be automatically deducted at the end, but the amount I'm being asked to pay in tax for the current year (excluding POA for next year) doesn't seem to have factored in what I paid last year.

Can anyone explain what I have to do or how it works? Thanks!

[Deleted User]

You work it out yourself. This confused me a lot too, it seemed crazy that they would leave it up to the tax payer to work out what they owe and not ham fist it and pay the wrong amount.

Take the amount that you paid on account already (you can find it listed in your hmrc account, I forget which page exactly) and deduct it from the amount you owe, then pay the remainder. Your account will update to show that your payment on account has been included once your payment is received.

PlutoinCapricorn

When you file a return, it is free-standing. There is no access to tax paid under PAYE or payments made on account.

Leave it to update your total figures overnight: the statement will show what you actually owe after payments received have been taken into account.

oysteroyster

Ah ok, that makes sense (in an antiquated HMRC sort of a way).

This will be my third time I've had to submit a self assessment - there's a chance that I may have actually paid the full amount last year, without deducting any POA from my first year - obviously HMRC haven't said anything - how do you think I would go about claiming this back?

Do you think I could pay this year's tax liability, minus the past two year's POA?

Thanks again.

oysteroyster

Anyone at all?

jennifernil

Did you pay immediately, or did you wait till you got the statement in January and then pay what it said?

The statement will include your POAs and show any balancing payment due for that year, and tell you your POAs for the current year.

If you put down your figures for each tax year, someone on the forum will be able to advise whether you paid the correct amount.

Alternatively, get your figures together and give HMRC a ring and ask them to check.

oysteroyster

Thanks for your help.

Looking back at my payments, it would appear that during my first year of trading (only a couple of months) I didn't reach the threshold to actually make a POA, so that solves that problem.

Regarding the statement, is this something sent out in the post or digitally (or both)? As far as I can remember, last time around I submitted online and then setup a Direct Debit payment pay the full amount shown on screen at the final stage of the online Self Assessment. If I submit this year, will I receive a statement from HMRC before the 31st January deadline or should I just pay the amount on screen, less the POA that I made last year?

PlutoinCapricorn

I would play around online and see what is there: you should get details of returns filed, payments made, statements etc.

Do bear in mind that it takes time for your account to be updated after you have submitted your figures.

You should get something in the post too, closer to the due date.