HRMC payment due dates for 2018/19 & 2019/20

delicious11

So yesterday, being a bit over zealous I completed my self assessment tax declaration on line to see how much I would have to pay on my rental income. This is the first time I am filing for a full year for this new source of money for tax year (2018/2019)which has just ended.
My calculation came back a bit higher than normal but manageable as I have been putting money aside to cover these costs.

However I am a bit miffed about the payment dates

According to my calculation for 2018/2019 xxxxx is due by the 31st January 2020

Plus another substantial sum for the half of 2019/20 is also due to be paid on same date.

Then a second sum for 2019/20 is also due by 31st July 2020??


My questions are:

Why has a calculation being produced for 2019/20 when I am yet to declare any rental income for this year?

It was my understanding that payments for the year 2019/20 would be due on 31st Jan 2021. Why am I being asked to clear the first half of the years account by jan 2020?

TheCyclingProgrammer

These are called payments on account and are due because your tax bill is over £1000.

They exist because HMRC would prefer to get their tax sooner rather than later. You get a rather long grace period in your first year (you will be paying tax next January a whole 10 months after the end of the tax year ended). Compare to people on PAYE who have to pay their tax as soon as they earn it. So you’re not being treated unfairly.

Your payments on account will be an estimate based on your earnings for 18/19. HMRC will assume you will earn the same amount. You are being asked to pay half in Jan 2020 - 10 months into the 19/20 tax year - and the other half in July several months after the tax year ends. If you set aside any tax on your rental income as you earn it then you should have no problems making these payments.

If end up earning more you will need to pay the additional tax as a balancing payment in Jan 21. If you earn less you will receive a refund.

If you KNOW you are going to earn less you can apply to reduce the payments on account to reflect what you think you will earn but be careful. If you reduce them too much and consequently have underpaid you may owe interest on the late payment.

BoGoF

Please explain why you are miffed?

delicious11

TheCyclingProgrammer wrote: »

These are called payments on account and are due because your tax bill is over £1000.

They exist because HMRC would prefer to get their tax sooner rather than later. You get a rather long grace period in your first year (you will be paying tax next January a whole 10 months after the end of the tax year ended). Compare to people on PAYE who have to pay their tax as soon as they earn it. So you’re not being treated unfairly.

Your payments on account will be an estimate based on your earnings for 18/19. HMRC will assume you will earn the same amount. You are being asked to pay half in Jan 2020 - 10 months into the 19/20 tax year - and the other half in July several months after the tax year ends. If you set aside any tax on your rental income as you earn it then you should have no problems making these payments.

If end up earning more you will need to pay the additional tax as a balancing payment in Jan 21. If you earn less you will receive a refund.

If you KNOW you are going to earn less you can apply to reduce the payments on account to reflect what you think you will earn but be careful. If you reduce them too much and consequently have underpaid you may owe interest on the late payment.

Thanks for the explanation.