SA Return - Payments in advance

Isthisforreal99

mlz1413 said:

The payment on account/ payment in advance is actually 'in Advance' as it is for next year.

I have to pay this too and it was a surprise the first time.

So when a tax bill is over an amount,  say £2000, then an extra 50% is added for payment on 31st Jan and 31st July towards the following year.

So an expected tax bill of £2000 on 31/1/25 becomes £3000.  
Then an extra £1000 is due by 31/7/25.
When the 25/26 return is submitted the £2000 paid on account can be used against that money due.

So it really is In Advance, even compared to PAYE which tax what you earn as you receive it.

Plus your tax code gets reduces at the same time, so you get less of any monthly payments. 

Oh dear, wrong on so many counts. In your example you are 10 months into the 25/26 tax year when your first POA is due on 31/1/2026 and paid half of the previius years liability as a POA. At most you will have paid 50% of your final 25/26 liability 10 months into 25/26 where a PAYE employee will have paid 80+%. By 5 April 2026 a PAYE employee will have paid 100% but you will still be sitting at 50% with the second POA not due until 31/7/2026 and maybe the final payment for 25/26 not being made till 31/1/2027

Dazed_and_C0nfused

mlz1413 said:

The payment on account/ payment in advance is actually 'in Advance' as it is for next year.

I have to pay this too and it was a surprise the first time.

So when a tax bill is over an amount,  say £2000, then an extra 50% is added for payment on 31st Jan and 31st July towards the following year.

So an expected tax bill of £2000 on 31/1/25 becomes £3000.  
Then an extra £1000 is due by 31/7/25.
When the 25/26 return is submitted the £2000 paid on account can be used against that money due.

So it really is In Advance, even compared to PAYE which tax what you earn as you receive it.

Plus your tax code gets reduces at the same time, so you get less of any monthly payments. 

I think you need a new calendar!

I'm going to check with HMRC if I can start paying my PAYE tax 10 months into the tax year.  I suspect the answer will be no.

[Deleted User]

Isthisforreal99 said:

mlz1413 said:

The payment on account/ payment in advance is actually 'in Advance' as it is for next year.

I have to pay this too and it was a surprise the first time.

So when a tax bill is over an amount,  say £2000, then an extra 50% is added for payment on 31st Jan and 31st July towards the following year.

So an expected tax bill of £2000 on 31/1/25 becomes £3000.  
Then an extra £1000 is due by 31/7/25.
When the 25/26 return is submitted the £2000 paid on account can be used against that money due.

So it really is In Advance, even compared to PAYE which tax what you earn as you receive it.

Plus your tax code gets reduces at the same time, so you get less of any monthly payments. 

Oh dear, wrong on so many counts. In your example you are 9 months into the 25/26 tax year when your first POA is due on 31/1/2026 and paid half of the previius years liability as a POA. At most you will have paid 50% of your final 25/26 liability 9 months into 25/26 where a PAYE employee will have paid 75%. By 5 April 2026 a PAYE employee will have paid 100% but you will still be sitting at 50% with the second POA not due until 31/7/2026 and maybe the final payment for 25/26 not being made till 31/1/2027

Unfortunately, having reread the post, miz is of the opinion that the payments on account payable in January and July 2025 are for 2025/26 tax year which really would be ‘ in advance’ where it be true. And, don’t forget, the payments on account may not be anywhere near half of the liability if a balancing payment subsequently becomes due!

Isthisforreal99

[Deleted User] said:

Isthisforreal99 said:

mlz1413 said:

The payment on account/ payment in advance is actually 'in Advance' as it is for next year.

I have to pay this too and it was a surprise the first time.

So when a tax bill is over an amount,  say £2000, then an extra 50% is added for payment on 31st Jan and 31st July towards the following year.

So an expected tax bill of £2000 on 31/1/25 becomes £3000.  
Then an extra £1000 is due by 31/7/25.
When the 25/26 return is submitted the £2000 paid on account can be used against that money due.

So it really is In Advance, even compared to PAYE which tax what you earn as you receive it.

Plus your tax code gets reduces at the same time, so you get less of any monthly payments. 

Oh dear, wrong on so many counts. In your example you are 9 months into the 25/26 tax year when your first POA is due on 31/1/2026 and paid half of the previius years liability as a POA. At most you will have paid 50% of your final 25/26 liability 9 months into 25/26 where a PAYE employee will have paid 75%. By 5 April 2026 a PAYE employee will have paid 100% but you will still be sitting at 50% with the second POA not due until 31/7/2026 and maybe the final payment for 25/26 not being made till 31/1/2027

Unfortunately, having reread the post, miz is of the opinion that the payments on account payable in January and July 2025 are for 2025/26 tax year which really would be ‘ in advance’ where it be true. And, don’t forget, the payments on account may not be anywhere near half of the liability if a balancing payment subsequently becomes due!

Which is why I said 'at most you will have paid 50%'