Thanks for the comments. Had a (quick) look at "Payments on Account" and cannot see any reason or logic for it except when tax owed exceeds £1000. Do you think the tax man might appreciate that this OAP had to save the necessary cash to pay 1st instalment for 2013/14, then under duress, borrowed the 2nd instalment, paid it and now has no more money to satisfy an immediate payment on demand for next year? Can this be the actual requirements of HMRC? R
The main logic behind the payment on account system (presuming a payment is needed) is sound in that no payment is needed until month 10 of the tax year and the second payment on account is not till after the tax years ends, compared to paye or subcontractors who have tax force-ably parted at source seems like a fair system if you ignore the complexities of trying to factor things through during the tax year. Presumably you are aware payments can be reduced down to nil or amount due if tax for that year is nil or lower than the previous year.
2. Completed 2013/14 Tax return on-line early Jan 2015.
By completing the return in January you have missed the deadline whereby amounts due could possibly be coded out and also payments on account avoided, if you don't like the payment on account system try to complete the return before the end of December if there is sufficient tax deducted at source from a pension so that coding would be possible.
One other thing - is the Op aware of the reason why the liability exists, if it is not known why there is a liability to me there is always a small chance the calculated figures may be amiss, if the reason is known as to why the liability exists then presumably that will aid the process with regard to planning for future bills (I.e. try to put aside at the time money as appropriate from any income not taxed at source so that there is always enough to cover the bills)