What are the options if I pay too much tax on account?

icicat

Hey all,

So I realised I need to put money into my payment on account for 22/23 tax year by 31st July, so I don't think I will have time to do my tax return to determine what I actually owe.

My freelance income differs each year, so 21/22 I could have been earning more, though HMRC will predict I will earn that same amount for 22/23, which I'm not sure I have.

So I paid one half of 22/23 on account in January, the next half is due in three days. When I do get round to completing my return for 22/23 and the amount is lower than the combined amount I paid on account, would I need to apply for a refund? Or could I keep the excess money on account and just add that to my next payment (23/24)?

Any advice would be great.

Also.. If I manage to complete my return on the 31st and pay it in is that enough time? Why would they want the second half of payment so long before the January 31st deadline for submitting the return and paying the tax?

Dazed_and_C0nfused

I think you're getting a bit confused.

For payment purposes the 31 January 2024 deadline is only relevant for any Balancing Payment for 2022-23 and the first POA for 2023-24 (if one is required).

The due date for the first and second POA for 2022-23 are 31 January 2023 and 31 July 2023.

Say you have paid £2,000 each POA (for 2022-23) and you actual 2022-23 liability is £3,500.  Each 2022-23 POA will be amended go £1,750 and the surplus £500 can either be refunded of used against a future liability, say the first POA for 2023-24.

It's perfectly normal to pay the 2022-23 POA as originally determined from your 2021-22 liability and if there is any overpayment when you come to file your 2022-23 return you can always ask for it be refunded and then sort out paying any 2023-24 POA nearer to January.

icicat

Hey thanks man. Yeah now you mention it that's exactly it, January is any balance that may have changed from the prediction amounts. Thanks for clearing that up. I always get confused each year with how it all works.

Ok understandable, so I can make the payment tomorrow and any over payments I can just request a refund. Though yes that's what I also wanted to know and think you answered is if I can just leave it in the account and deduct from the next POA and that's perfectly fine. As long as I remember leaving it in there lol.