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Retired and not working but asked to pay tax in advance
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Gudrun
Posts: 30 Forumite

in Cutting tax
Hello, I have been retired for several years.
Due to several bonds having matured during the 2024025 tax year, the interest I received was higher than usual and I had to pay over £1,000 in income tax for the year.
That was to be expected, but I was also asked to make two advance payments for next year, one by end January 2026 and one by end July 2026. (I will not be receiving so much interest next year)
Just checking that this sounds correct? I had thought advance payments only applied to people in work. Many thanks for any advice.
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Gudrun said:Hello, I have been retired for several years.Due to several bonds having matured during the 2024025 tax year, the interest I received was higher than usual and I had to pay over £1,000 in income tax for the year.That was to be expected, but I was also asked to make two advance payments for next year, one by end January 2026 and one by end July 2026. (I will not be receiving so much interest next year)Just checking that this sounds correct? I had thought advance payments only applied to people in work. Many thanks for any advice.
POA can apply to anyone in Self Assessment, being in work is of no relevance.
You can make a claim to reduce them if you are confident the 2025-26 liability will be less.
For example if each POA is £550 and you think the actual liability will be £800 you would reduce each POA to £400.
But if you get this wrong HMRC will charge you interest on any tax you pay late.2 -
No, the rules on payments on account (not advance - not getting into that argument again!) apply if your tax bill comes from investment income.
You can request to reduce them to what you consider a more appropriate level.1 -
POAs are a PITA when you have a good year followed by a leaner one, but like death.......2
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Thank you all very much for confirming that this is correct. And thank you for the warning about interest on late payment of tax.Yes it will be a PITA (had to look that up - I'm as innocent in every other aspect of life as I am about finances).0
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Ayr_Rage said:POAs are a PITA when you have a good year followed by a leaner one, but like death.......
Submit your return asap after 6 April and both POAs requested will be adjusted , iif necessary , to reflect the reduced income amount.
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sheramber said:Ayr_Rage said:POAs are a PITA when you have a good year followed by a leaner one, but like death.......
Submit your return asap after 6 April and both POAs requested will be adjusted , iif necessary , to reflect the reduced income amount.2 -
Yes, many thanks!That is a very good idea.0
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