Payment on account and what exactly I need to pay in?

icicat

Hey all,

I would really appreciate some help with this as no matter how many returns I fill in, I always forget or get confused by the payment on account, and what I need to be subtracting and paying in.

So here is my calculation for 2022/2023 tax year:



Here are my payment on accounts:



Am I right in thinking I need to pay by 31st January £4,989.30 minus £1,552.04 from Jul 23? So £3,437.26 in total.

What would the January 23 payment (£2,072.70) be for?

Cheers!

eskbanker

Your equivalent 2021/22 statement should clarify what those previous PoAs covered?

icicat

I had a look over the calculation from the previous year. it says 1st payment on account for 2022-23 due 31 January 2023

So is this stating that this payment I made in January is towards the 22/23 tax year amount? As well as the payment I made in July 23?

icicat

So looking at the payment received in January 2023 it's a combination of whatever tax I owed for 2021/2022 and the £1,552.03 amount for 2022-23 in the 21-22 tax calculation. So am I correct in thinking I deduct £1,552.03 (jan23 payment) and £1,552.04 (jul23 payment) from the final 22/23 calculation and pay in the rest?

eskbanker

It does sound plausible that your residual liability for 2022/23 is £3,326.20 less the two £1,552s, but best bet will be to follow their advice in the first image and check the statement of account within your personal tax account, once updated.

[Deleted User]

icicat said:

So looking at the payment received in January 2023 it's a combination of whatever tax I owed for 2021/2022 and the £1,552.03 amount for 2022-23 in the 21-22 tax calculation. So am I correct in thinking I deduct £1,552.03 (jan23 payment) and £1,552.04 (jul23 payment) from the final 22/23 calculation and pay in the rest?

Correct. There are always two things to look at - your liability and what is due. 

Your liability for 2022/23 is £3326.20. You have paid two payments on account towards this in January and July 2023 which total £3104.07 and now owe £223.13 for that year. 

You also have payments  on account for 2023/24 - half of your liability for 2022/23 - £1663.10 each. 

Total due on 31st January is £1886.23 (1663.10 plus 223.13)

icicat

Thanks. yes you're right I should finish the return and wait for it to appear on my SOA. However, since I have left it so late it might not show up in time for the deadline (midnight of the 31st?) in which case I'm about 95% sure it is £3,326.20 less the two £1,552s and plus the POA for this tax year.

icicat

@[Deleted User] great! Thanks for confirming that (I missed your post when posting my previous reply) So after submitting my return, I'm still not seeing anything in the tax owed in the personal tax account. If it still hasn't updated by the 31st is it safe to assume I just pay the £1886.23 before I miss the deadline?

Dazed_and_C0nfused

icicat said:

@[Deleted User] great! Thanks for confirming that (I missed your post when posting my previous reply) So after submitting my return, I'm still not seeing anything in the tax owed in the personal tax account. If it still hasn't updated by the 31st is it safe to assume I just pay the £1886.23 before I miss the deadline?

It takes a few days for your account to be updated once you submit your return.

If you submit it today it's probably worth checking on Friday to see if it's been updated and if the £1,886.23 was correct.

You might find it useful to make your own written note of what you are paying i.e. £1,663.10 of the £1,886.23 is towards your eventual liability for 2023-24.

icicat

Thanks @Dazed_and_C0nfused. The only issue is I have until tomorrow midnight to pay in the amount owed. So if it still doesn't show up should I pay the £1886.23 anyway? Or is the deadline for submitting the SA only and you can pay past the deadline? Don't want to get fined

Dazed_and_C0nfused

icicat said:

Thanks @Dazed_and_C0nfused. The only issue is I have until tomorrow midnight to pay in the amount owed. So if it still doesn't show up should I pay the £1886.23 anyway? Or is the deadline for submitting the SA only and you can pay past the deadline? Don't want to get fined

You would only be "fined" if anything owed for 2022-23 remained unpaid 30 days after 31 January 2024.  This would be a flat 5%.  Further penalties can be charged later if it remains unpaid

But you will be charged interest, calculated daily on any outstanding balance.  The interest rate is 7.75%, so not insignificant over a period of time, and would be applied to anything paid late for 2022-23 or 2023-24.

Not sure why you aren't just paying now 🤔