HMRC self assessment: payments on account...

MarkyTe

Hi everyone,
Last year was my first time doing self assessment.
As well as the tax for the 16/17 tax year, I had to make 2 payments on account for the 17/18 tax year.

Now I'm doing my 1718 return.
Surely those 2 payments on account should be deducted from the tax now due for 17/18?
They don't seem to have been deducted automatically and I can't see anywhere to enter the payments made.

Am I misunderstanding how the payments on account work?
Or am I just missing the place to enter them?
Or should they be included automatically and the error is at HMRC's end?
Or... Something else?

Very grateful for any help or advice anyone can give.
Thanks in advance

Dazed_and_confused

You are almost certainly confusing two things.

Self Assessment tax calculation (payments on account are irrelevant, this is just a calculation of your liability for a particular tax year)

Self Assessment account (shows your liabilities and payments made)

Surely those 2 payments on account should be deducted from the tax now due for 17/18?

They will be reflected on your account

They don't seem to have been deducted automatically and I can't see anywhere to enter the payments made.

You do not include them on your return as they are irrelevant when calculating your tax liability.

You need to file the return, ignoring payment s you have made.

Two or three days later log into your Self Assessment account and it should have been updated to take into account your 2017:18 return.

MarkyTe

Ahhhh, that makes sense!
Thanks so much

DannyPearce90

Unfortunately they make you pay 1 forward every time and the amount is based on your last year. Nonsense I know, but that's how they operate.

BoGoF

DannyPearce90 wrote: »

Unfortunately they make you pay 1 forward every time and the amount is based on your last year. Nonsense I know, but that's how they operate.

How is it paying forward. You are 9 months into the tax year and being askes to pay half your tax bill.

TheCyclingProgrammer

DannyPearce90 wrote: »

Unfortunately they make you pay 1 forward every time and the amount is based on your last year. Nonsense I know, but that's how they operate.

As said above, you’re making a payment on account for the *current* tax year, which has a shade over 2 months left when the first payment is due. So you’ve basically been given 10 months before you pay any tax for the year. Contrast with PAYE where tax is taken immediately as you earn it.

TripleH

I think you would also have to make payments on account for the 2018/19 tax year by the 31st January as well? So your tax bill would not just be total tax for 2017/18 less payments already made. (assuming income has remained at a similar level to 2017/18).