Where do previous payments on account appear on current year tax return?

intalex

I'm keying in figures into my 25/26 personal tax return having made 1 payment on account for that tax year already and another due in July. In the main self assessment (right up to the calculation and "submit" button), I don't see either of those 2 payments on account featuring anywhere, and instead the balancing payment shows the full liability for the tax year (along with 2 new payments on account in lieu of 26/27).

I have 2 questions I would appreciate some help with:

1. Is it normal for the previous payments on account to not feature on the self-assessment itself, but that it does get taken into account to calculate the final tax liability due (or rebate) by 31 January?
2. My 25/26 payments on account were based on 24/25 income and liability, but my actual liability for 25/26 has come a bit lower. Would submitting this tax return now adjust my 2nd payment on account for 25/26 (due 31st July) to the balance to actual, or would I still pay what was originally estimated (based on 24/25) and then recover the excess as a rebate?

Keen to understand this a bit better before I hit the "submit" button.

Thanks

Dazed_and_C0nfused

https://forums.moneysavingexpert.com/discussion/6662881/where-do-previous-payments-on-account-appear-on-current-year-tax-return

Payments you have already made are never part of your tax return.

They are shown on your Self Assessment account, not your tax return or Self Assessment tax calculation.

And it has been like that since day 1 of Self Assessment about 30 years ago.

Payments on account will only ever a maximum of 1 pence different to each other. So if they were originally say £700 each and your 2025/26 liability is £1,200 in total then they will each be reduced to £600. They would never be £700 and £500.

intalex

Understood on my first question, but for my 2nd question and using your example values, if I submit my tax return now, will the July payment on account be reduced to £500 or will it remain £700 and then I have to request a £200 rebate after this July payment on account?

Dazed_and_C0nfused

https://forums.moneysavingexpert.com/discussion/comment/81951650#Comment_81951650

Neither. Both POA will be reduced to £600.

And if you have paid the first POA then the £100 overpaid on that first POA will be a credit on your Self Assessment account.

And closer to July that £100 will be used to pay part of the £600 payable in July for the second POA.

A small amount of interest will also be added, leaving just under £500 that you would need to pay.

intalex

So I better delete the direct debit for 31 July and set one up closer to time with a precise amount?

I wonder if HMRC really need the cash flow from payment on account, and couldn't just leave it all to 31 January due date? So messy (in my opinion)…

Dazed_and_C0nfused

https://forums.moneysavingexpert.com/discussion/comment/81951662#Comment_81951662

Well the expectation is that for people within MTD for Income Tax, quarterly payments will eventually come into play so I suspect getting rid of POA for those in Self Assessment is probably unlikely.

It's a messy system that has, on the whole, worked fine since Self Assessment was first introduced.

intalex

A small amount of interest will also be added, leaving just under £500 that you would need to pay.

Does this interest only accrue from the SA submission date (up to 2nd POA due date), or does it accrue between the 1st and 2nd POA due dates regardless of when I submit the SA ?

Dazed_and_C0nfused

https://forums.moneysavingexpert.com/discussion/comment/81951681#Comment_81951681

It's from the date (in HMRC's eyes) you paid the first POA to 31 July.

The date you file the return isn't a factor in this scenario.

https://www.gov.uk/hmrc-internal-manuals/self-assessment-manual/sam111010

intalex

And is that interest taxable or tax-free, or have they already witheld some tax in lieu of that interest?

My brain is already giving me circular reference errors…

Dazed_and_C0nfused

https://forums.moneysavingexpert.com/discussion/comment/81951694#Comment_81951694

It's exempt from tax.

https://www.gov.uk/hmrc-internal-manuals/savings-and-investment-manual/saim2320

intalex

I submitted my 25/26 tax return yesterday and this morning it is showing a credit from the "revised" 1st payment of account which it says will be allocated to the 2nd payment of account and so the difference is the balance due on 31 July. No mention of interest yet, so I've amended the 31 July DD to the difference, but will amend it again closer to time if credit interest does show up and further reduces the balance due.