Payments on Account - PAYE

PhoenixFlames

I have just completed my self-assessment for the 5th year.  This time however I am being asked to also make two payments on account.  All of my income is PAYE and from searching the HMRC website I found this:

You must make these 2 payments, unless either:

• the amount of tax you owed last year was less than £1,000
• last year you paid more than 80% of the tax you owed outside of Self Assessment (for example through your tax code or because your bank had already deducted interest on your savings)

I clearly come under the second point.  

I have had NO LUCK at all getting the helpline to assist or even understand what I am querying.  The last conversation I had went along the lines of "this is just what we're doing now".  

The response from HMRC on the official forum literally just repeated the above to me with no ability to actually change anything.  Additionally, the calculation for the expected tax owed next year (aka not collected by PAYE) is about 10% of the proposed payments on account.   I've also just received a message from them saying I don't have to do another Self Assessment next year unless advised otherwise. 

I feel a little crazy going in circles with them on this.  I accept I might have got something wrong, so if someone could take the time to explain it to me that would be very much appreciated. 

Dazed_and_C0nfused

PhoenixFlames said:

I have just completed my self-assessment for the 5th year.  This time however I am being asked to also make two payments on account.  All of my income is PAYE and from searching the HMRC website I found this:

You must make these 2 payments, unless either:

• the amount of tax you owed last year was less than £1,000
• last year you paid more than 80% of the tax you owed outside of Self Assessment (for example through your tax code or because your bank had already deducted interest on your savings)

I clearly come under the second point.  

I have had NO LUCK at all getting the helpline to assist or even understand what I am querying.  The last conversation I had went along the lines of "this is just what we're doing now".  

The response from HMRC on the official forum literally just repeated the above to me with no ability to actually change anything.  Additionally, the calculation for the expected tax owed next year (aka not collected by PAYE) is about 10% of the proposed payments on account.   

I feel a little crazy going in circles with them on this.  I accept I might have got something wrong, so if someone could take the time to explain it to me that would be very much appreciated. 

You have clearly misunderstood something.  Being on PAYE itself does not prevent POA.

Can you post,

A.  What your total liability was (from your Self Assessment calculation)

B.  How much of that you are having to pay under Self Assessment

C.  How much each POA for 2024-25 is

PhoenixFlames

Hi 

I understand that PAYE only doesn't stop payments on account.  But I do pay more than 80% of all my tax via PAYE - its approx 95% each and every time and is the main source of my confusion.  I have no other income apart from my full-time employment.  

Rough figures are that I owe £1.1k and they also want two payments of £550 as payments on account.  The calculation for next year shows that they expect me to owe £105 in tax.  I was expecting to just have my tax code adjusted as usual instead of being asked to pay in advance.  

DRS1

In the self assessment form there are boxes to tick dealing with payments on account and collecting the tax due through your tax code.  Did you tick the same boxes as previous years (assuming the tax code adjustment is what they did in previous years)?

PhoenixFlames

When I originally got the calculation at the end it showed no payments on account at all - it was after submitting it and going back to pay it now shows a payment on account as required.  I have a screenshot of the calculation for my bill before submission.  

Hmm if this is all just down to ticking/not ticking the correct box I guess I could just apply to have them reduced or removed and it put through my tax code instead - but it seems strange that their systems can't calculate the whole "pays almost all tax via PAYE" part automatically.  

I have in previous years either paid the tax owed outright or had my tax code adjusted if it was more than I had to hand.  I've never had payments on account applied before when I've chosen to just pay what is owed.  

I'm going back to look through the return now as apparently I can amend it - lets see if there is a wildly obvious box I forgot to actually tick.  

DRS1

Someone will be along to correct me but if HMRC are saying don't do a self assessment return for next year then I would ask why you should be making a payment on account of next years tax.  There would be nothing to set the payment against.  As far as I can work out the PAYE and self assessment bits of HMRC are quite distinct and don't really interact.

PhoenixFlames

OK I can only assume that HMRC are having a really crazy time with their systems.  I've now gone through the entire tax return again and resubmitted it WITHOUT changing anything other than slightly amending some minor figures around interest I owe and I now have



instead of the previous amount



I will keep a close eye on this over the next few weeks to see if anything else strange happens.  

Thanks for the replies.  

Dazed_and_C0nfused

PhoenixFlames said:

OK I can only assume that HMRC are having a really crazy time with their systems.  I've now gone through the entire tax return again and resubmitted it WITHOUT changing anything other than slightly amending some minor figures around interest I owe and I now have



instead of the previous amount



I will keep a close eye on this over the next few weeks to see if anything else strange happens.  

Thanks for the replies.  

You must have changed something pretty fundamental for the liability to alter by that much.

I would be surprised if HMRC updated their systems on a bank holiday so it will 99.999% be down to the data you have entered.

PhoenixFlames

When I say minor I'm talking about £13.  I've checked the calculation summaries and the figures all look correct and identical.  Just my salary and extra tax on savings not in an ISA and offset by GiftAid  

I now have an occasional error message telling me there is a skipped section (every other time I log in) and even the helpline can't work out what is going on (it is complete).   I'm just going to wait a few days for the recalc to run fully.  I don't rule out having done something stupid but it seems this is more of a systems issue than a tax one.  

Most years this is just a tedious filling in of figures they already have.  I will never complain about it being dull again.