Payments on account not deducted from Tax Return

ApolloHubble

When I submitted my 23/24 Tax Return, as well as paying my tax owed for the year 23/24, I also had to pay two payments on account for the year 24/25. This is the first year I have had to do this. One payment was due 31/1/25 and the other 31/7/25. I paid them both in good time (one before January 2025 and the other by February 2025) so assumed this money would be deducted from what I owed in my Tax Return 24/25. I'm now looking at submitting my Tax Return for 24/25 but there seems to be no consideration of the Payments on account that I made for the year 24/25. Not only do they want me to pay my tax for the year 24/25 without any deduction of my two payments on account for 24/25,  but they also want extra money paid on account for the year 25/26 in two payments by 31/1/26 and 31/7/26.  How does this work? Why are they taking money in advance, and why is there no acknowledgement of these upfront payments on account? Do they just work it out once I submit my recent Tax Return?

Ayr_Rage

Do the payments you have already paid appear in your online account (payments/credits received) ?

Dazed_and_C0nfused

ApolloHubble said:

When I submitted my 23/24 Tax Return, as well as paying my tax owed for the year 23/24, I also had to pay two payments on account for the year 24/25. This is the first year I have had to do this. One payment was due 31/1/25 and the other 31/7/25. I paid them both in good time (one before January 2025 and the other by February 2025) so assumed this money would be deducted from what I owed in my Tax Return 24/25. I'm now looking at submitting my Tax Return for 24/25 but there seems to be no consideration of the Payments on account that I made for the year 24/25. Not only do they want me to pay my tax for the year 24/25 without any deduction of my two payments on account for 24/25,  but they also want extra money paid on account for the year 25/26 in two payments by 31/1/26 and 31/7/26.  How does this work? Why are they taking money in advance, and why is there no acknowledgement of these upfront payments on account? Do they just work it out once I submit my recent Tax Return?

POA you have made are never part of your tax calculation.

Once you submit your return your Self Assessment account will be updated to show the updated situation.

For example if your return shows a liability of say £3,500 for 2024/25 and you have paid two POA of £1,250 each you will have a Balancing Payment of just £1,000 to pay next January.

And possibly POA for 2025/26 of £1,750 (each POA).

DRS1

First comment - you really don't need to pay the second payment on account as early as February.  They won't give you any interest on the amount you pay early.

Second comment - there is a figure where you won't have to pay payments on account.  I may be wrong but I think it is where the total tax due is less than £1000 

Third comment - you may want to check if you still need to do a self assessment.  Payments on account go hand in hand with self assessment. But I am not sure what happens to them if you manage to escape self assessment (for example if you did not need to do a self assessment for 25/6 then would you need pay the 25/6 POA or would you only escape the 26/7 POA).

ApolloHubble

DRS1 said:

First comment - you really don't need to pay the second payment on account as early as February.  They won't give you any interest on the amount you pay early.

Second comment - there is a figure where you won't have to pay payments on account.  I may be wrong but I think it is where the total tax due is less than £1000 

Third comment - you may want to check if you still need to do a self assessment.  Payments on account go hand in hand with self assessment. But I am not sure what happens to them if you manage to escape self assessment (for example if you did not need to do a self assessment for 25/6 then would you need pay the 25/6 POA or would you only escape the 26/7 POA).

I paid it in February to get it out the way, I wasn't expecting any interest.
I do self-assessment and I pay more than £1000 tax.
Yes, as part of my 24/25 tax return submission, I have been charged the extra on account for 25/26.

ApolloHubble

Ayr_Rage said:

Do the payments you have already paid appear in your online account (payments/credits received) ?

Yes they do

Ayr_Rage

ApolloHubble said:

Ayr_Rage said:

Do the payments you have already paid appear in your online account (payments/credits received) ?

Yes they do

In that case, once you have filed your return for 24/25 whatever the calculation shows as payable will be correct and if that includes further Payments on Account you'll need to pay them.

SVaz

Yes,  if you had already done your 24-25 return,  it would all be sorted out. 

My POA were updated once I’d done my 24-25 Tax return back in May,  I was refunded the excess and they left enough in to cover July’s POA. 

sheramber

Does it not say on the calculation page that it does not include any payments already made? 

ApolloHubble

sheramber said:

Does it not say on the calculation page that it does not include any payments already made? 

No it doesn't. The amount it shows that I owe is if I had not paid POA previously

ApolloHubble

Ayr_Rage said:

ApolloHubble said:

Ayr_Rage said:

Do the payments you have already paid appear in your online account (payments/credits received) ?

Yes they do

In that case, once you have filed your return for 24/25 whatever the calculation shows as payable will be correct and if that includes further Payments on Account you'll need to pay them.

The amount it states I owe shows no consideration of credit that I paid POA.