Really confused about paying my tax? Amount isn't adding up :(

icicat

Hi all,

So I'm about to pay my tax today and I'm really confused about something..

I go to my self assessment page and navigate to 'Current position' to see what I owe.

The total comes to: 13,737.34 (which is including 2 x payments on account for 2025)

However, my tax calculation when I filled out my return states that I owe 15,557.47

At first I though has it automatically deducted the 3,326.2 payment on account I made last tax year? Though that would mean I should owe: 15,557.47 - 3,326.2 = 12,231.27

Does it even deduct the payments on account in the amounts on the 'Current position' page? I'm very confused and HMRC phoneline is crazy busy. Would really appreciate the help. Thanks

eskbanker

Rather than considering overall totals, you'd probably need to share more detail of liabilities and payments per tax year for anyone to be able to offer suggestions?

DRS1

Somewhere on your self assessment page there is a breakdown of the bill.  Your tax is made up of the balancing payment for 23/4 and the payments on account for 24/5.  Only one payment on account is due by 31 January the other is not due until 31 July

Your tax calculation from the self assessment return does not usually take account of the payments on account you have made so won't tie up with the tax demand

icicat

Ok that makes sense. Looking at my calculation from this year it states:

1. Total tax, Student Loan repayment and Class 4 NICs due before any payments on account:

£ 10899.67

5. Capital Gains Tax due

£ 4657.80

So if I subtracted payment on account from last year (3,326.2) from the total tax amount (10899.67) it works out as 7,573.47, which is closer to the balancing payment amount in the overview page of 7,495.47.

If this is the case why is it not asking me for the 4657.80 in capital gains tax due? Is capital gains excluded from this page? Am I just expected to pay it based on my calculation?

Nomunnofun1

icicat said:

Ok that makes sense. Looking at my lcalculation from this year it states:

1. Total tax, Student Loan repayment and Class 4 NICs due before any payments on account:

£ 10899.67

5. Capital Gains Tax due

£ 4657.80

So if I subtracted payment on account from last year (3,326.2) from the total tax amount (10899.67) it works out as 7,573.47, which is closer to the balancing payment amount in the overview page of 7,495.47.

If this is the case why is it not asking me for the 4657.80 in capital gains tax due? Is capital gains excluded from this page? Am I just expected to pay it based on my calculation?

Capital gains tax does not affect payments on account. 

For some reason you believe that you only made one payment on account. 

You owe £15557.47 of which £4657.80 is capital gains (leaving £10899.67).

You presumably made two payments on account of £4031 which is £8062. I calculate that £7495.47 is your balancing payment (£15557.47 - £4031 -£4031. 

Your payments on account for 2024/25 should be £5449.83 (half of £10899.67) Are they?

That would mean that you now owe £12945.30. 

So - what payments on account did you make in January and July 2024?

icicat

@Nomunnofun1 thanks, though I should have mentioned the payments on account made last year totalled at £3326.20, so 2 x £1,663.1

Nomunnofun1

icicat said:

@Nomunnofun1 thanks, though I should have mentioned the payments on account made last year totalled at £3326.20, so 2 x £1,663.1

In that case you should owe £12237.27 for 2023/24 plus first payment on account of £5449.83 for 2024/25. 

What are the payments on account for 2024/25? 

icicat

so my payments on account for next year are 2 x £3,120.93

Nomunnofun1

icicat said:

so my payments on account for next year are 2 x £3,120.93

Is there a student loan in the balancing payment and how much?

icicat

Sorry guys I think I got it now. So I was looking at the return thinking it was the calculation and it looked as if the capital gains amount was separate to the total tax amount. Though I realise now the total tax amount is inclusive of the capital gains, it's just pointed out what the CG payment is in the breakdown. That's a relief! Really appreciate the help. Sorry for my brain not working today! :-O 

DRS1

icicat said:

so my payments on account for next year are 2 x £3,120.93

That suggests a tax bill for 2023/4 of £6241.86   When you add the CGT of £4657.80 that gets you to the total tax of £10899.67 (well 66p).

Does that sound right - ie the CGT is included in the total tax figure and not added to it?

If so the £10899.67 - £3326.20 gives a balancing payment of £7573.47 which when added to the first payment on account gives £10694.40 due by 31 January.

When you include the second payment on account that gives £13,815.33 which is close to your figure of £13,737.34 in the first pot though no cigar.