self assessement, what does balancing payment, and 1 st payment

pete1975

morning all,   i've skipped through my self assessment today (have to do one because we claim Child tax benefits) and i wanted  to make sure i have enough put aside or will enough have by December time. At the bottom it shows  1st payment on account for 2020-21 due 31 January 2021 £1,806.35 So i'm just trying to work out what i need to set aside for 2019/20  - is it £5419.05  ? And whats a balancing payment ? Total income on which tax has been charged £50,824.00 Income Tax due     £12,772.20 plus High Income Child Benefit Charge £2,501.00 Income Tax due     £15,273.20 minus Tax deducted From all employments, UK pensions and state benefits £11,643.00 Interest received from UK banks and building societies £17.50 Total tax deducted £11,660.50 Total Income Tax due     £3,612.70 Estimated payment due by 31 January 2021 You must pay the total of any tax and class 4 NIC due for 2019-20 plus first payment on account due for 2020-21 by 31 January 2021 (Note: 2nd payment of £1,806.35 due 31 July 2021) This amount does not take into account any 2019-20 payments on account you may have already made 2019-20 balancing payment £3,612.70 1st payment on account for 2020-21 due 31 January 2021 £1,806.35 Total due by 31 January 2021 £5,419.05

unholyangel

Balancing payment is the amount required to "balance" your liability (ie satisfy it) for that tax year/return. 

The payment on account is a prepayment towards next years liability and will be 50% of this years liability. You can alter these - but you should only do so if they are genuinely going to be lower because if it turns out to be more than the amount you lower it to, it would attract interest. 

The due date for both the balancing payment & payment on account is 31 jan - so yes, you'd be paying both. 

unholyangel

Almost forgot to mention, there will be a 2nd payment on account due by 31st July

pete1975

unholyangel said:

Balancing payment is the amount required to "balance" your liability (ie satisfy it) for that tax year/return. 

The payment on account is a prepayment towards next years liability and will be 50% of this years liability. You can alter these - but you should only do so if they are genuinely going to be lower because if it turns out to be more than the amount you lower it to, it would attract interest. 

The due date for both the balancing payment & payment on account is 31 jan - so yes, you'd be paying both. 

great thankyou.  When you say a 2nd payment by 31st July.  is that towards this same amount or there will be more tax?

EdSwippet

pete1975 said:

...
minus Tax deducted
...
Interest received from UK banks and building societies £17.50

Not related to your actual question, but ... really? UK banks and building societies have been paying interest gross (without any tax deduction) since 2016. Just checking ...

EdSwippet

pete1975 said:

great thankyou.  When you say a 2nd payment by 31st July.  is that towards this same amount or there will be more tax?

Not unholyangel, but since I'm here -- and to save them the trouble -- your 31st July payment will be the same as your first payment on account in Jan (excluding the 'balancing payment'), so £1806.35 on the numbers you gave. HMRC explanation and example here:

https://www.gov.uk/understand-self-assessment-bill/payments-on-account

pete1975

EdSwippet said:

pete1975 said:

...
minus Tax deducted
...
Interest received from UK banks and building societies £17.50

Not related to your actual question, but ... really? UK banks and building societies have been paying interest gross (without any tax deduction) since 2016. Just checking ...

hello,  thats what my bank statement is showing the interest i earned.

Jeremy535897

pete1975 said:

EdSwippet said:

pete1975 said:

...
minus Tax deducted
...
Interest received from UK banks and building societies £17.50

Not related to your actual question, but ... really? UK banks and building societies have been paying interest gross (without any tax deduction) since 2016. Just checking ...

hello,  thats what my bank statement is showing the interest i earned.

You have entered the interest in the "taxed UK interest" box, when I suspect it should have been in the "untaxed UK interest" box. The bank statement should say whether the interest is paid gross or net. Net would be very unusual.

pete1975

Jeremy535897 said:

pete1975 said:

EdSwippet said:

pete1975 said:

...
minus Tax deducted
...
Interest received from UK banks and building societies £17.50

Not related to your actual question, but ... really? UK banks and building societies have been paying interest gross (without any tax deduction) since 2016. Just checking ...

hello,  thats what my bank statement is showing the interest i earned.

You have entered the interest in the "taxed UK interest" box, when I suspect it should have been in the "untaxed UK interest" box. The bank statement should say whether the interest is paid gross or net. Net would be very unusual.

ok, i'll log back and in check again,  thankyou

polymaff

Or it is income like Halifax Rewards, Co-op Everyday Rewards, declared as Taxed Interest when it should be under Other Income?

pete1975

EdSwippet said:

pete1975 said:

...
minus Tax deducted
...
Interest received from UK banks and building societies £17.50

Not related to your actual question, but ... really? UK banks and building societies have been paying interest gross (without any tax deduction) since 2016. Just checking ...

hi, i checked my tax self assessment and i always fill this ,  do i not need to then?  I would earn about £70 interest over the year