Payments on account

jennifernil

When HMRC are deciding whether POAs are required, to avoid them do both the following statements need to be true?

your last Self Assessment tax bill was less than £1,000

you’ve already paid more than 80% of all the tax you owe, for example through your tax code or because your bank has already deducted interest on your savings

BoGoF

No, not both.

If less than £1,000 then no POA's due...to be pedantic this is not based on the last 'tax bill' but the actual tax owed for the year based on your calculation.

The '80% rule' only applies if tax owing more than £1,000.

polymaff

jennifernil wrote: »

When HMRC are deciding whether POAs are required, to avoid them [STRIKE]do both[/STRIKE] one of the following statements need to be true?

your last Self Assessment tax bill was less than £1,000

you’ve already paid more than 80% of all the tax you owe, for example through your tax code or because your bank has already deducted interest on your savings

And, I agree that, by the time the get-out-of-POA event happens, the triggering assessment will by then be in the past tax year...:)

jimmo

https://www.gov.uk/hmrc-internal-manuals/self-assessment-manual/sam1010

Auldgit

Just done an analysis of my SA tax statements for the last 12 years, over which period my SA bills vary from over £2000 to £0 per annum. Next year they are asking for £2700. My income has stayed more or less the same for many years, and the wide variation in bills has been caused solely by the utterly confusing way that HMRC apply the Payments on Account rules. This makes sensible planning impossible.



Why oh why don't they just send me a bill for the amount of tax I owe for last year, let me pay it and leave it at that?? Too simple I suppose. Must keep thousands of civil servants in jobs applying all these pointless rules.....!

polymaff

There was a time when HMRC - or was it IR then - would collaborate with the idea of simple settlements - and when PoA was a process only applying to a few, (like Income tax - and then paying higher rates were once, too!).


When gross savings interest was introduced, I asked HMRC how they were going to deal with the cashflow problems this would cause them. They told me that they had a plan - but wouldn't tell me what it was. Well, I guessed right and here it is - loads of people getting enmeshed in PoA via extrapolation - caused not just by gross interest but by their new mission statement ((c) Polymath, 2016):


"We want your money - and we want it now"...:):):)