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Where Taxpayers and Advisers Meet

Self assessment POA

Phil long
Posts:7
Joined:Mon Jan 18, 2021 11:06 pm
Self assessment POA

Postby Phil long » Mon Jan 18, 2021 11:17 pm

Hi

I deferred the July 2020 POA 2nd payment but paid the 1st POA in January 2020.

As they are the same amounts will the net impact on the 2021 self assessment be zero. i.e. I will not need to pay the 2nd deferred payment from July as the first payment will cover it?

Thanks

robbob
Posts:3228
Joined:Wed Aug 06, 2008 4:01 pm

Re: Self assessment POA

Postby robbob » Tue Jan 19, 2021 9:56 am

I deferred the July 2020 POA 2nd payment but paid the 1st POA in January 2020.

As they are the same amounts will the net impact on the 2021 self assessment be zero. i.e. I will not need to pay the 2nd deferred payment from July as the first payment will cover it?
Not 100% sure exactly what you are asking here - technically payment on account still needs to be paid - albeit as with every year when your final tax bill is calculated there is a chance both payments on account may have been or could be revised - eg if tax lower than the sum of the two payments due.
You will need to finalise your year end tax bill asap to find out if not already done

example you calculate 5/4/2020 bill as being £1200
you paid first payment on account of say 500 last jan
second payment of 500 will need to be paid 31/1/2021
balancing payment of 200 will also need to be paid

If your ye tax 5/4/20 bill was only £800 second payment could be lowered to £300 necessary to clear down that year tax

Ref 2021 nothing changes and payments on account are calculated as normal with reference to ye 5/4/2020 tax bill . In above case if it was bog standard you woudl have £600 to pay

So potentially you have full second payment on acount + posisble balancing payment both ref ye 5/4/20 and potentially the new payment on account calculated the same was as if the second payment had not been delayed.

Note some individuals who have had payments on account and a balancing payment that was requested to be coded out may find hmrc computers have done funny things with regard to second payment on acount and tax coded out - these people should contact hmrc for help/clarification

Phil long
Posts:7
Joined:Mon Jan 18, 2021 11:06 pm

Re: Self assessment POA

Postby Phil long » Tue Jan 19, 2021 11:09 am

Thanks. To clarify in 2020 my 1st POA was 2500 which I paid last January 20 but not the 2nd POA in July 20 which I deferred.

My self assessment calculation for 19/20 is c.7500 plus 3250 1st POA.

So this month I would expect to pay 10750?

robbob
Posts:3228
Joined:Wed Aug 06, 2008 4:01 pm

Re: Self assessment POA

Postby robbob » Tue Jan 19, 2021 12:00 pm

So this month I would expect to pay 10750?
clear as mud unfortunately :(
My self assessment calculation for 19/20 is c.7500 plus 3250 1st POA.
what is your actual self assesment bill ignoring any payments on account due or made ???

If your ye 5/4/20 bill ignoring any payments on account due or made is 7500 and you have paid 2.5k towards that bill you owe 5k towards ye 5/4/2020
If you have payment on account to make of 3250 ye 5/4/2021 that would be 3250+5000 = 8250 to pay so i must be missing something here.

I would say always calculate year end tax bill without the complication of factoring any payments on acount first be careful about any sketchy wording used by hmrc that may adjust for payments on account - you need to go to the detailed tax calc that should have bottom ye 5/4/2020 bill - thats your bill and you take from that the 2.5k that you have paid

Phil long
Posts:7
Joined:Mon Jan 18, 2021 11:06 pm

Re: Self assessment POA

Postby Phil long » Tue Jan 19, 2021 12:16 pm

Thanks yes 7500 is my bill for 20/21 excluding POA.

So the 2nd POA of 2500 which I deferred in July 20 can be ignored and will not need to be paid in this case? Just the remaining 5000 (7500-2500 less 1st POA Jan20) plus 3250 for 1st POA Jan21. So total 8250.

Once I submit the self assessment how long does it take for the final calculation to appear taking into account POAs and where can I find it?

robbob
Posts:3228
Joined:Wed Aug 06, 2008 4:01 pm

Re: Self assessment POA

Postby robbob » Tue Jan 19, 2021 1:42 pm

So the 2nd POA of 2500 which I deferred in July 20 can be ignored and will not need to be paid in this case? Just the remaining 5000 (7500-2500 less 1st POA Jan20) plus 3250 for 1st POA Jan21. So total 8250.
Technically speaking the second payment on account does need to be paid - its just part of the 5k you pay this month.

Your payments ref ye 5/4/2020 will be labelled as follows

first payment on account 19/20 paid jan 2020 £2,500
second payment on account 19/20 paid jan 2021 £2,500
balancing payment due for 19/20 paid january 2021 £2,500

Total paid january 2021 ref ye 5/4/2020 = £5000 - so thats the 5k you mentioned above

Phil long
Posts:7
Joined:Mon Jan 18, 2021 11:06 pm

Re: Self assessment POA

Postby Phil long » Thu Jan 21, 2021 11:10 am

Thanks. I have now submitted the return. The calculation states 7000 balancing payment plus 3500 1st POA Jan 21.

But when looking at the current position it states 3500 1st POA Jan 21, 3500 2nd POA July 21 and 1250 balancing payment Jan 21.

Taking into account 1st POA in July 20 of 2900 I was expecting a balancing payment of 4100 (7000-2900) which is stated in tax year overview 20. Does anyone know why the balancing payment in the current position does not match the balancing payment in the tax overview?

Phil long
Posts:7
Joined:Mon Jan 18, 2021 11:06 pm

Re: Self assessment POA

Postby Phil long » Thu Jan 21, 2021 12:27 pm

On my current position there are two totals. One total is the 2900 which is my 2nd POA from July 20 which I deferred. The other total is 8250 which includes 1st POA 3500 for Jan 21, 2nd POA 3500 for July 21 and balancing payment 1250.
So for January do I need to pay 7650 based on:
2900 2nd POA July 20 plus
3500 1st POA Jan 21 and
1250 balancing payment

Is there somewhere which shows the total amount due in January?

bd6759
Posts:4262
Joined:Sat Feb 01, 2014 3:26 pm

Re: Self assessment POA

Postby bd6759 » Thu Jan 21, 2021 4:49 pm

Your statement of account shows the amount due.

You stated this thread saying your bill was £7500 and that your POAs were £2500 each.

You are now saying the bill is £7000 and your POAs were £2900. If that were the case, the balancing payment would not be £1250.

Try to be consistent and accurate if you want to use random figures. Otherwise use the actual figures. Also tell us is you made a claim to reduce the POAs and if so, from what amount.

The amount you need to pay is the amounts you have self assessed less any POAs you have already paid. On top of that you also pay half of you self assessment as a POA for next year. There may also be interest depending on the circumstances.

LegallyBrunette
Posts:10
Joined:Thu Jan 21, 2021 12:10 pm

Re: Self assessment POA

Postby LegallyBrunette » Thu Jan 21, 2021 5:03 pm

I have just had a call from a client who was using their tax account to figure out what to pay, instead of my email... I could see why they are confused. Even when I look at their HMRC account, I am confused, and I have been doing this a long time!!

On the bottom of your HMRC tax calculation, you will see the payment summary

It will say:

2019-20 balancing payment - (this will be the tax on your income less anything that was deducted at source like PAYE - it wont take into account your payment on account).
1st payment on account for 2020-21 due by 31 January 2021
Total due by January 2021

Subtract the first payment account, which you made in Jan20, from "Total due by 31 January 2021", and this should be what you need to pay

I cant see for that for 100% from this distance, but that's the likely scenario


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