Self Assessment

jagnew1234

Hi, because I have rental income I have to complete a self assessment each year. This is the 4th year I have done it without any concerns. This time when I get to the end and it tell me how much I owe for the year (1500) it also says I should pay 750 first payment on account of 2018/19. Have I ticked a wrong box somewhere or has there been a change recently. I did ask HMRC but never got a reply. Thanks

[Deleted User]

The first thing that you have to remember is that the tax year that you are completing is 2017/18 and is payable on 31st January 2019 - a full ten months after the end of the tax year! Those on PAYE do not have this luxury.

I would suggest that this is the first year that your liability has exceeded £1000. If that is the case HMRC insist that you also make a payment on account for 2018/19 tax year - half in January 2019 and half in July 2019.

When you complete your return for 2018/19 both payments will be credited against the final tax due.

Let's say that your bill is £1400 for next year (2018/19). You will have made payments on account of £1500 and will have overpaid £100. Payments on account will be £700 each for 2019/20. Total payable on 31st January 2020 will be £600 (£700 less overpayment £100) and a further payment of £700 will be due on 31st July 2020.

jagnew1234

Thanks for that. Yes last year I bought a 2nd property and it must have pushed me over some threshold, hadn't realised that. Thanks again.

Skyhigh

* Sounds like Payment On Account as Purdy says. I'd always recommend ringing HMRC to clarify. Call wait time can be bad, but usually far quicker that spending hours trawling the web/docs!