rules about second payment on account

FFHillbilly

Last year my personal tax was £10k so this January my 1st payment on acount was £5k, when tax return filed in July total tax for the year was only £5.5k

Accountnt sent me a tax overview showing I had to pay the remaining balance (£500) in Jan 27

approx 2 weeks after the 31st July I got a letter from HMRC saying I had failed to pay the second £5000 payment on account, called the accountant to check they said it's probably a mistake and will go away, assured me I was upto date with payments and the tax wasn't due untill next Jan 27

looked on the HMRC dashboard just this week and they were still showing the £500 as unpaid and are adding interest not it's at £530. called accountnant again and they reccomended I called HMRC, which i did the next day only to be told that I need to pay it, and they couldn't comment on what my accountnant had told me…

was my accountant wrong , or have HMRC made a mistake? It's been paid now

Dazed_and_C0nfused

Based on your figures each POA would be reduced to £2,750, you definitely wouldn't have £500 to pay next January.

Have you checked your tax account to see if the return has actually been received by HMRC?

FFHillbilly

It was definetly filed and received by HMRC , and yes the payments on account were reduced to those figures.

is it time for me to get a new accountant?

Dazed_and_C0nfused

So if each POA were reduced to £2,750 and you have paid £5,000 doesn't your tax account show only ~£500 is now owed?

It would be less a bit of credit interest from HMRC for the £2,250 that was moved from the January to the July POA and plus a bit of late payment interest from July to now. But still ~£500, not £5,000.

mebu60

I can't envisage any scenario where the £500 would be deferred to January 2027.

Having had similar experience with HMRC processes many years ago I now always make second PoA end July then submit current year return early August, especially when I know it'll generate a rebate.

sheramber

Tax due £5500

POAs reduced to £2750 each.

Paid £5000 in January so credit of £5000- 2750 = £2250 available to move to July POA.

Leaving a balance of £500 to pay for second POA .

FFHillbilly

ok thanks for confirming.

I've rounded the figures for ease, the amount overdue was slightly less despite having £30 interest added to it and I couldn't figure out why, but It makes sense now i've basically been creditied interest for the overpayment in January

so my accountant gave me the wrong advice? I have it in writing from them on a tax overviewand it's been questioned over the phone twice…