Self-assessment payment on account question

Dorian847

Hello, I would appreciate some help with explaining the payment on account.

Filled in the self-assessment for the first time last year. I paid ca. £3500 as a balancing payment and ca. £1800 as a payment on account. Paid another £1800 in July 2018.

I knew that my income would drop significantly for this year. The overall taxable income for this year (after the deduction of the personal allowance) was ca. £4000, down from £12000.

I am supposed to pay £1300 plus a payment on account of £500.

Why is not the £1300 covered by the previous payment of £1800 account from July?

I am also confused by the following info from the SA website because I was assuming that by paying £1800 in July I was pre-paying tax due this January?
'HM Revenue and Customs will add this amount to your Self Assessment statement of account. It doesn't include any 2017 to 2018 payments on account you may have made or any other amounts outstanding.'


Many thanks for any help.

TheCyclingProgrammer

The reason is exactly as explained above.

Your tax return calculation is for your liability for 2017/18 ONLY. Your payments on account do not come into it.

Your liability will be added to your statement or account along with any payments on account already made. You will then be due a reimbursement if you’ve overpaid.

[Deleted User]

Yes - the last quoted paragraph is self-explanatory.

The position would appear to be :

Total liability 2017/18 £1300 less payments made on account £3600 = refund due £2300.

2018/19 payment on account due £500 (if correct)

Dorian847

I see. Thank you very much!

polymaff

Dorian847 wrote: »

I see. Thank you very much!

If it helps, you are not the only one being confused by this issue.


The key to the future is to understand that the Tax Calculation is now less significant than the Self Assessment Statement - in that the result of the tax calculation is just one input to the document that tells you exactly where you stand, the self assessment statement.