Self Assessment 'On Account' demand.

Riggsy68

I run a small business and have been filing a Self Assessment for the last 13 years. Usually I have to pay an 'On Account' figure in July for the forthcoming tax year. I have just received a letter from HMRC chasing me for the figure of £816.00 which they forecast I will owe on account for 22 / 23. However, I estimate I will be drawing approximately £13,000 less this tax year from the business in the form of Dividends (I was not in the 40% bracket last year). I can ill afford the £816 they are demanding, so my question is if I contact them will they take this into consideration and write it off? I wanted some advice before I go through the ar*eache of sitting on hold forever. 

DE_612183

you can change your estimate of the On Account figure online - log into personal tax account ,and then self assessment.

Dazed_and_C0nfused

Riggsy68 said:

I run a small business and have been filing a Self Assessment for the last 13 years. Usually I have to pay an 'On Account' figure in July for the forthcoming tax year. I have just received a letter from HMRC chasing me for the figure of £816.00 which they forecast I will owe on account for 22 / 23. However, I estimate I will be drawing approximately £13,000 less this tax year from the business in the form of Dividends (I was not in the 40% bracket last year). I can ill afford the £816 they are demanding, so my question is if I contact them will they take this into consideration and write it off? I wanted some advice before I go through the ar*eache of sitting on hold forever. 

You have got confused somewhere as you never have to pay tax in advance!

The July 2022 POA is, when required, the second POA for the 2021:22 tax year.  Which ended 6 months ago.

The first POA for 2022:23 isn't payable until 31 January 2023, nearly 10 months after the 2022:23 tax year started.

What exactly are you being asked to pay?

And have you filed your 2021:22 tax return yet?

sheramber

the payment on account for July will be reassessed , if necessary, when you submit your 21/22 tax return.
 
That return will assess your taxable income for the year April 21 to April 22

If you consider your tax payable will be less than the payments of account of  £816  x 2 then you can request to reduce them  to a lower amount. Bear in mind if you reduce them too much you will be charged interest on any unpaid amount.

Remember, these payments are for  your income received for year to April 22, not your income for 22/23.
April

Your income for 22/23 will be included on your return issued April 23.


If you rely on your income for the current year to pay your tax bill for last year you run the risk of having a large bill to pay from a lower income received the following year.

return 20/21   sent after April 21   balancing payment due January 22 

 first payment on account January 22 for 21/22   second payment on account for 21/22  July 22.

21/22 return submitted after April 22  when Payments on account paid in 22 will be reviewed in accordance with submitted return

edited for dates in line 2

[Deleted User]

Sheramber - typo second line - should read 21/22.

sheramber

[Deleted User] said:

Sheramber - typo second line - should read 21/22.

Which is what it says.

I assume you mean 20/21.  oops

[Deleted User]

sheramber said:

purdyoaten2 said:

Sheramber - typo second line - should read 21/22.

Which is what it says.

I assume you mean 20/21.  oops

The 2020/21 return had to be submitted eight months ago - as I know you know. Should it not read:

the payment on account for July will be reassessed , if necessary, when you submit your 21/22 (not 20/21) tax return. 
 
That return will assess your taxable income for the year April 21 to April 22’

sheramber

Which is what I said in the first place.

That return will assess your taxable income for the year April 21 to April 22

[Deleted User]

sheramber said:

Which is what I said in the first place.

That return will assess your taxable income for the year April 21 to April 22

It originally stated 20/21 and I note that you have amended it now. I hadn’t quoted it in order that you could amend without fuss. Just trying to be helpful! We will leave it there!

Dazed_and_C0nfused

[Deleted User] said:

sheramber said:

Which is what I said in the first place.

That return will assess your taxable income for the year April 21 to April 22

It originally stated 20/21 and I note that you have amended it now. I hadn’t quoted it in order that you could amend without fuss. Just trying to be helpful! We will leave it there!

Yes, it definitely said 20/21 when first posted 🙂

Riggsy68

Many thanks for your replies everyone. I forgot to tick the box telling me when I had received a reply, so didn't realise.