Interest on self assessment

Isoheaps1

I've just come to pay my self assessment for 21-22 and hmrc wanted payment in January 22 for about 40% payment in july of about 40% and the remainder in Jan 23. They've charged interest for not paying by these deadlines. I submitted my self assessment in September 22 so how possibly are they expecting me to pay before the tax year ends, before I've submitted a self assessment and before the following January when its usually due? And then to add insult to injury adding interest to it when its not late? 

[Deleted User]

We’re you required to make payments on account for 2021/22 based on the return for 2020/21 that you submitted LAST year - and didn’t?

From what you have said it is also a possibility that you are required to make payments on account for 2022/23 in January 2023 and July 2023 but, without knowing the figures, this is not definite. 

Isoheaps1

[Deleted User] said:

We’re you required to make payments on account for 2021/22 based on the return for 2020/21 that you submitted LAST year - and didn’t?

From what you have said it is also a possibility that you are required to make payments on account for 2022/23 in January 2023 and July 2023 but, without knowing the figures, this is not definite. 

You might be right, but this is the first year I've had it like this. Why am i expected to pay on guesswork now? And can i opt out and just pay what is due when it is due? Being self employed no 2 years are the same. Especially since they started playing god in 2020 with the economy 

[Deleted User]

The rules for payments on account have not changed since 1997. 

The tax year ended on 5th April 2022 - payments on account for that year are due on 31st January 2022 and 31st July 2022 - the latter being four months after the end of the tax year! These would have been detailed on your return for 2020/21. It could well be the first time that you have had to make them as your tax liability would have had to exceed £1000 in order to be obliged to make them. But you can’t just ignore them and, No, you can’t opt out. Have a read here:

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

sheramber

The tax due for 21/22 is for income received between April 212 and April 22.

iF you had been employed you would have been paying tax on that income from April21.

so, by asking you to pay an estimated amount in January 22 you are paying tax  9 months later.

BY January you should have an idea of how your profit is comparing to the previous year so can assess whether  you will pay more, less or the same amount of tax. 

you can then decide if you can reduce the payments on account  for that year because your profit figure will be less. But , if you reduce them too much  they will be reinstated when you submit your return and you will be charged interest on late payment.

If you submit your return asap after APRIL then any adjustment to the payments on account will be made before the July payment is due.

You can then pay the requested amount. Any overpayment made in the January payment on account will be credited to the July payment on account