How do I adjust my tax due in January (increasing it)

premiumz

Hi,

I adjusted the tax due in January back in July when I made a payment. Things weren't going so well and I based what I would owe on the income at the time.
Since then things have picked up and I need to make an adjustment for January's payment as I believe it will need to be increased.

After logging in through Government Gateway and into the self assessment area, I can only see an adjustment option for people who want to lower their tax bill, not increase it.
Am I to use that same tool although it says only use this tool for lowering your tax bill?

Many thanks

Dazed_and_C0nfused

Presumably you wish to adjust your POA?

If you are referring to the 2020:21 POA then it depends on whether you have filed the 2020:21 return.

If you mean the 2021:22 POA then I thought you could just enter the amount you want each POA to be and HMRC will adjust your account.  Remembering that the POA cannot exceed the amount determined by they return of the previous year.

For example if the 2020:21 return showed that each POA for 2021:22 should be £2000 then the maximum they can be is £2000.

[Deleted User]

Dazed_and_C0nfused said:

Presumably you wish to adjust your POA?

If you are referring to the 2020:21 POA then it depends on whether you have filed the 2020:21 return.

If you mean the 2021:22 POA then I thought you could just enter the amount you want each POA to be and HMRC will adjust your account.  Remembering that the POA cannot exceed the amount determined by they return of the previous year.

For example if the 2020:21 return showed that each POA for 2021:22 should be £2000 then the maximum they can be is £2000.

My take is that the op may have reduced the POA due in July 2021 by too much, now that the return is being finalised.

If that is the case it is simply a matter of paying a greater balancing payment on 31st January and expect an interest charge on the amount originally due in July 2021 (and possibly January 2021 if both POAS were reduced). 

The payments on account for 2020/21 will be automatically adjusted to the original amounts or to half of the final liability for 2020/21, whichever is lower.

premiumz

So my 20-21 predicted payments were on Jan/July 21. I already submitted my 20-21 accounts which reduced my July payment. That's all done and dusted.
But when I filed my accounts it then put up my January predicted figure, stating what was needed to pay in Jan 22. It mentioned I could reduce this figure if I believe my 21-22 accounts were going to be significantly less than my previous year's accounts.

At that time they were far less than what the predicted figure in Jan 22 made them out to be. So I reduced it a lot based on what the income had been for the last few months in July. However, things picked up after that and so I know my 21-22 accounts will be more than the predicted tax due in Jan 22. This is why I need to increase that figure now and then make the payment.

I hope I have explained that well enough as it does seem slightly confusing when reading it back!

[Deleted User]

premiumz said:

So my 20-21 predicted payments were on Jan/July 21. I already submitted my 20-21 accounts which reduced my July payment. That's all done and dusted.
But when I filed my accounts it then put up my January predicted figure, stating what was needed to pay in Jan 22. It mentioned I could reduce this figure if I believe my 21-22 accounts were going to be significantly less than my previous year's accounts.

At that time they were far less than what the predicted figure in Jan 22 made them out to be. So I reduced it a lot based on what the income had been for the last few months in July. However, things picked up after that and so I know my 21-22 accounts will be more than the predicted tax due in Jan 22. This is why I need to increase that figure now and then make the payment.

I hope I have explained that well enough as it does seem slightly confusing when reading it back!

Ah - so I interpreted you incorrectly. You have two options I believe. Ring HMRC and advise that you wish to adjust your payments on account again (phone 8am). Alternatively (and what I would do) is simply make the revised (increased) payment on 31st January. I would then submit your return as soon as possible after 6th April - your payments on account, both for  31st January and 31st July will adjust after that. 

premiumz

[Deleted User] said:

premiumz said:

So my 20-21 predicted payments were on Jan/July 21. I already submitted my 20-21 accounts which reduced my July payment. That's all done and dusted.
But when I filed my accounts it then put up my January predicted figure, stating what was needed to pay in Jan 22. It mentioned I could reduce this figure if I believe my 21-22 accounts were going to be significantly less than my previous year's accounts.

At that time they were far less than what the predicted figure in Jan 22 made them out to be. So I reduced it a lot based on what the income had been for the last few months in July. However, things picked up after that and so I know my 21-22 accounts will be more than the predicted tax due in Jan 22. This is why I need to increase that figure now and then make the payment.

I hope I have explained that well enough as it does seem slightly confusing when reading it back!

Ah - so I interpreted you incorrectly. You have two options I believe. Ring HMRC and advise that you wish to adjust your payments on account again (phone 8am). Alternatively (and what I would do) is simply make the revised (increased) payment on 31st January. I would then submit your return as soon as possible after 6th April - your payments on account, both for  31st January and 31st July will adjust after that. 

If I do my accounts and predict the next few months and then make a payment based on that. Will they charge me interest if I got it wrong by a few quid? Also, am I meant to pay the full tax on the 21-22 accounts or half of it and the other half in July?

Thanks

[Deleted User]

premiumz said:

purdyoaten2 said:

premiumz said:

So my 20-21 predicted payments were on Jan/July 21. I already submitted my 20-21 accounts which reduced my July payment. That's all done and dusted.
But when I filed my accounts it then put up my January predicted figure, stating what was needed to pay in Jan 22. It mentioned I could reduce this figure if I believe my 21-22 accounts were going to be significantly less than my previous year's accounts.

At that time they were far less than what the predicted figure in Jan 22 made them out to be. So I reduced it a lot based on what the income had been for the last few months in July. However, things picked up after that and so I know my 21-22 accounts will be more than the predicted tax due in Jan 22. This is why I need to increase that figure now and then make the payment.

I hope I have explained that well enough as it does seem slightly confusing when reading it back!

Ah - so I interpreted you incorrectly. You have two options I believe. Ring HMRC and advise that you wish to adjust your payments on account again (phone 8am). Alternatively (and what I would do) is simply make the revised (increased) payment on 31st January. I would then submit your return as soon as possible after 6th April - your payments on account, both for  31st January and 31st July will adjust after that. 

If I do my accounts and predict the next few months and then make a payment based on that. Will they charge me interest if I got it wrong by a few quid? Also, am I meant to pay the full tax on the 21-22 accounts or half of it and the other half in July?

Thanks

Interest is charged by HMRC on late payments at 2.75% per annum. 

You need to understand how payments on account work. 

The payments on account for 2021/22 will based on half of your tax liability for 2020/21. 

Let’s say that your tax liability for 2020/21 is £10000 and, for 2021/22, £14000. 

The tax for 2021/22 is paid as follows:

31st January 2022 £5000 (half of 2020/21)
31st July 2022 £5000 again.

Balance payable (£14000 less 2 x £5000) is £4000. This is due 31st January 2023.

Your POAs for 2022/23 would be £7000 each (half of £14000)

premiumz

purdyoaten2 said:

premiumz said:

purdyoaten2 said:

premiumz said:

So my 20-21 predicted payments were on Jan/July 21. I already submitted my 20-21 accounts which reduced my July payment. That's all done and dusted.
But when I filed my accounts it then put up my January predicted figure, stating what was needed to pay in Jan 22. It mentioned I could reduce this figure if I believe my 21-22 accounts were going to be significantly less than my previous year's accounts.

At that time they were far less than what the predicted figure in Jan 22 made them out to be. So I reduced it a lot based on what the income had been for the last few months in July. However, things picked up after that and so I know my 21-22 accounts will be more than the predicted tax due in Jan 22. This is why I need to increase that figure now and then make the payment.

I hope I have explained that well enough as it does seem slightly confusing when reading it back!

Ah - so I interpreted you incorrectly. You have two options I believe. Ring HMRC and advise that you wish to adjust your payments on account again (phone 8am). Alternatively (and what I would do) is simply make the revised (increased) payment on 31st January. I would then submit your return as soon as possible after 6th April - your payments on account, both for  31st January and 31st July will adjust after that. 

If I do my accounts and predict the next few months and then make a payment based on that. Will they charge me interest if I got it wrong by a few quid? Also, am I meant to pay the full tax on the 21-22 accounts or half of it and the other half in July?

Thanks

Interest is charged by HMRC on late payments at 2.75% per annum. 

You need to understand how payments on account work. 

The payments on account for 2021/22 will based on half of your tax liability for 2020/21. 

Let’s say that your tax liability for 2020/21 is £10000 and, for 2021/22, £14000. 

The tax for 2021/22 is paid as follows:

31st January 2022 £5000 (half of 2020/21)
31st July 2022 £5000 again.

Balance payable (£14000 less 2 x £5000) is £4000. This is due 31st January 2023.

Your POAs for 2022/23 would be £7000 each (half of £14000)

Hi,

Thanks for the response.

So I'll give a hypothetical example of my situation with some made up figures to see if I am on the right page.

I went self-employed in April/May 2019.

I did my 2019-2020 accounts and in January 2021 I had to pay £10,000 (full tax amount for 2019-2020 accounts) + £5000 (predicted for 2020-2021 in advance) and another £5000 in July 2021.

I completed my 2020-2021 accounts before the July 2021 payment was due. This reduced the £5000 figure because I did not earn as much. This figure was reduced automatically once I submitted my accounts.

While I was logged in to my self-assessment portal. It showed me what I would owe in January 2022. It said £8000 for example. However, at that time, things were rough and I knew I wouldn't owe anywhere near that amount.
This is where I noticed an option on the website that basically said, if you think you'll likely owe less, then you can amend the figure due in January 2022 to what you believe it to be.

I lowered it to £1000. However, since then, things have picked up and I believe I now owe closer to £4000 for the whole 2021-2022 accounts. (April 21 - April 22)

So with all that in mind. Do I just amend it to £4000? Or do I split that payment up £2000 in January and £2000 in July?
If I just pay the £4000 in January, do I owe nothing in July?

Many thanks

Dazed_and_C0nfused

POA are always equal (or 1p different).

So you cannot have them £4,000 and £0

But you could have £2,000 and £2,000

[Deleted User]

premiumz said:

purdyoaten2 said:

premiumz said:

purdyoaten2 said:

premiumz said:

So my 20-21 predicted payments were on Jan/July 21. I already submitted my 20-21 accounts which reduced my July payment. That's all done and dusted.
But when I filed my accounts it then put up my January predicted figure, stating what was needed to pay in Jan 22. It mentioned I could reduce this figure if I believe my 21-22 accounts were going to be significantly less than my previous year's accounts.

At that time they were far less than what the predicted figure in Jan 22 made them out to be. So I reduced it a lot based on what the income had been for the last few months in July. However, things picked up after that and so I know my 21-22 accounts will be more than the predicted tax due in Jan 22. This is why I need to increase that figure now and then make the payment.

I hope I have explained that well enough as it does seem slightly confusing when reading it back!

Ah - so I interpreted you incorrectly. You have two options I believe. Ring HMRC and advise that you wish to adjust your payments on account again (phone 8am). Alternatively (and what I would do) is simply make the revised (increased) payment on 31st January. I would then submit your return as soon as possible after 6th April - your payments on account, both for  31st January and 31st July will adjust after that. 

If I do my accounts and predict the next few months and then make a payment based on that. Will they charge me interest if I got it wrong by a few quid? Also, am I meant to pay the full tax on the 21-22 accounts or half of it and the other half in July?

Thanks

Interest is charged by HMRC on late payments at 2.75% per annum. 

You need to understand how payments on account work. 

The payments on account for 2021/22 will based on half of your tax liability for 2020/21. 

Let’s say that your tax liability for 2020/21 is £10000 and, for 2021/22, £14000. 

The tax for 2021/22 is paid as follows:

31st January 2022 £5000 (half of 2020/21)
31st July 2022 £5000 again.

Balance payable (£14000 less 2 x £5000) is £4000. This is due 31st January 2023.

Your POAs for 2022/23 would be £7000 each (half of £14000)

Hi,

Thanks for the response.

So I'll give a hypothetical example of my situation with some made up figures to see if I am on the right page.

I went self-employed in April/May 2019.

I did my 2019-2020 accounts and in January 2021 I had to pay £10,000 (full tax amount for 2019-2020 accounts) + £5000 (predicted for 2020-2021 in advance) and another £5000 in July 2021.

I completed my 2020-2021 accounts before the July 2021 payment was due. This reduced the £5000 figure because I did not earn as much. This figure was reduced automatically once I submitted my accounts.

While I was logged in to my self-assessment portal. It showed me what I would owe in January 2022. It said £8000 for example. However, at that time, things were rough and I knew I wouldn't owe anywhere near that amount.
This is where I noticed an option on the website that basically said, if you think you'll likely owe less, then you can amend the figure due in January 2022 to what you believe it to be.

I lowered it to £1000. However, since then, things have picked up and I believe I now owe closer to £4000 for the whole 2021-2022 accounts. (April 21 - April 22)

So with all that in mind. Do I just amend it to £4000? Or do I split that payment up £2000 in January and £2000 in July?
If I just pay the £4000 in January, do I owe nothing in July?

Many thanks

Pay £2000 now and £2000 in July. 

premiumz

[Deleted User] said:

premiumz said:

[Deleted User] said:

premiumz said:

purdyoaten2 said:

premiumz said:

So my 20-21 predicted payments were on Jan/July 21. I already submitted my 20-21 accounts which reduced my July payment. That's all done and dusted.
But when I filed my accounts it then put up my January predicted figure, stating what was needed to pay in Jan 22. It mentioned I could reduce this figure if I believe my 21-22 accounts were going to be significantly less than my previous year's accounts.

At that time they were far less than what the predicted figure in Jan 22 made them out to be. So I reduced it a lot based on what the income had been for the last few months in July. However, things picked up after that and so I know my 21-22 accounts will be more than the predicted tax due in Jan 22. This is why I need to increase that figure now and then make the payment.

I hope I have explained that well enough as it does seem slightly confusing when reading it back!

Ah - so I interpreted you incorrectly. You have two options I believe. Ring HMRC and advise that you wish to adjust your payments on account again (phone 8am). Alternatively (and what I would do) is simply make the revised (increased) payment on 31st January. I would then submit your return as soon as possible after 6th April - your payments on account, both for  31st January and 31st July will adjust after that. 

If I do my accounts and predict the next few months and then make a payment based on that. Will they charge me interest if I got it wrong by a few quid? Also, am I meant to pay the full tax on the 21-22 accounts or half of it and the other half in July?

Thanks

Interest is charged by HMRC on late payments at 2.75% per annum. 

You need to understand how payments on account work. 

The payments on account for 2021/22 will based on half of your tax liability for 2020/21. 

Let’s say that your tax liability for 2020/21 is £10000 and, for 2021/22, £14000. 

The tax for 2021/22 is paid as follows:

31st January 2022 £5000 (half of 2020/21)
31st July 2022 £5000 again.

Balance payable (£14000 less 2 x £5000) is £4000. This is due 31st January 2023.

Your POAs for 2022/23 would be £7000 each (half of £14000)

Hi,

Thanks for the response.

So I'll give a hypothetical example of my situation with some made up figures to see if I am on the right page.

I went self-employed in April/May 2019.

I did my 2019-2020 accounts and in January 2021 I had to pay £10,000 (full tax amount for 2019-2020 accounts) + £5000 (predicted for 2020-2021 in advance) and another £5000 in July 2021.

I completed my 2020-2021 accounts before the July 2021 payment was due. This reduced the £5000 figure because I did not earn as much. This figure was reduced automatically once I submitted my accounts.

While I was logged in to my self-assessment portal. It showed me what I would owe in January 2022. It said £8000 for example. However, at that time, things were rough and I knew I wouldn't owe anywhere near that amount.
This is where I noticed an option on the website that basically said, if you think you'll likely owe less, then you can amend the figure due in January 2022 to what you believe it to be.

I lowered it to £1000. However, since then, things have picked up and I believe I now owe closer to £4000 for the whole 2021-2022 accounts. (April 21 - April 22)

So with all that in mind. Do I just amend it to £4000? Or do I split that payment up £2000 in January and £2000 in July?
If I just pay the £4000 in January, do I owe nothing in July?

Many thanks

Pay £2000 now and £2000 in July. 

Okay. So If I figure out what I would owe so far and then predict the next couple of months. Pay half now and half in July. It will show up on the account as over paying until I submit my accounts in April and then it will recalculate and correct itself with the new accounts? Do you think I should still call the HMRC if I do this or leave it as they will likely just say to do the same thing? Thanks for your help