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[Help] Any accountants / tax return experts



S

Springal

Well-known member
Feb 12, 2005
23,849
GOSBTS
It is that bit between Christmas & New Year where I get round to doing my tax return.

It appears I have underpaid tax through PAYE this year and I have a slightly larger than expected tax bill to be paid in January for 2019/2020. When completing the tax return it does give the option to claim to reduce 2020/2021 payments on account just before you submit.

I had planned to top up my private pension in March where I would get additional tax relief that would work back in my favour. Is this enough to 'reduce payments on account' to pay 0 in January, on the basis of a big rebate that will be due in 2020/2021?
 




Pavilionaire

Pavilionaire

Well-known member
Jul 7, 2003
30,590
Springal said:
It is that bit between Christmas & New Year where I get round to doing my tax return.

It appears I have underpaid tax through PAYE this year and I have a slightly larger than expected tax bill to be paid in January for 2019/2020. When completing the tax return it does give the option to claim to reduce 2020/2021 payments on account just before you submit.

I had planned to top up my private pension in March where I would get additional tax relief that would work back in my favour. Is this enough to 'reduce payments on account' to pay 0 in January, on the basis of a big rebate that will be due in 2020/2021?
Click to expand...

If you manage to file your Tax Return today you can request that your 2019/20 liability be coded in for 2021/22, so nothing to pay end of January 21 ( If any later than 30 Dec 20 you can't get 19/20 liability coded in).
 


W

warmleyseagull

Well-known member
Apr 17, 2011
4,221
Beaminster, Dorset
Springal said:
It is that bit between Christmas & New Year where I get round to doing my tax return.

It appears I have underpaid tax through PAYE this year and I have a slightly larger than expected tax bill to be paid in January for 2019/2020. When completing the tax return it does give the option to claim to reduce 2020/2021 payments on account just before you submit.

I had planned to top up my private pension in March where I would get additional tax relief that would work back in my favour. Is this enough to 'reduce payments on account' to pay 0 in January, on the basis of a big rebate that will be due in 2020/2021?
Click to expand...

Yes, it is. It is not a penalty offence to reduce POAs but you would pay 2.6% interest on the amount of unpaid tax from 31 January to date of payment.
 


Wrong-Direction

Wrong-Direction

Well-known member
Mar 10, 2013
13,427
That reminds me, I gave my books to my accountant in March and he still hasnt done them!

Sent from my SM-A600FN using Tapatalk
 


R

rippleman

Well-known member
Oct 18, 2011
4,578
warmleyseagull said:
Yes, it is. It is not a penalty offence to reduce POAs but you would pay 2.6% interest on the amount of unpaid tax from 31 January to date of payment.
Click to expand...

Totally concur and endorse this response.

Anybody charged Payments on Account (POA) can apply to reduce them down (to zero if required). HMRC won't challenge an application to reduce POAs but just be prepared to get hit with the interest charge if it subsequently transpires that some or all of the POAs were due.
 








schmunk

schmunk

"Members"
Jan 19, 2018
9,519
Mid mid mid Sussex
Weststander said:
If someone always reduces their POA to a level significantly below the final tax bill (divided by 2), I wonder if HMRC can raise penalties on top of the interest.

I haven’t seen any one attempt this.
Click to expand...

The PoAs will only ever accrue interest, but the final tax return liability (including any amounts which should have been covered by PoAs) will generate tax-geared charges on top (starting with 5% after 30 months unpaid). Continued non-payment can result in court proceedings.

The fixed £100 etc. *penalties* are levied for late filing of tax returns, rather than late payment of tax.
 
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D

dsr-burnley

Well-known member
Aug 15, 2014
2,194
schmunk said:
The PoAs will only ever accrue interest, but the final tax return liability (including any amounts which should have been covered by PoAs) will generate tax-geared *surcharges* on top (starting with 5% after 6 months unpaid). Continued non-payment can result in court proceedings.

The fixed £100 etc. *penalties* are levied for late filing of tax returns, rather than late payment of tax.
Click to expand...
The 5% tax geared surcharge is for tax returns filed late, not for tax paid late. There isn't a surcharge for any reasonably-calculated deduction from payments on account, even if it later turns out that you miscalculated.
 


schmunk

schmunk

"Members"
Jan 19, 2018
9,519
Mid mid mid Sussex
dsr-burnley said:
The 5% tax geared surcharge is for tax returns filed late, not for tax paid late. There isn't a surcharge for any reasonably-calculated deduction from payments on account, even if it later turns out that you miscalculated.
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Sorry, you're correct about the word "surcharge", but there are tax-geared 5% charges for late payment of tax, as well as late filing. The first is actually after 30 days and I have amended my post.

It's been a while since I've dealt with the details of this - all my clients pay their tax on time (because I pay it for them all together in a lump sum!)
 






Gazwag

Gazwag

5 millionth post poster
Mar 4, 2004
30,170
Bexhill-on-Sea
dsr-burnley said:
The 5% tax geared surcharge is for tax returns filed late, not for tax paid late. There isn't a surcharge for any reasonably-calculated deduction from payments on account, even if it later turns out that you miscalculated.
Click to expand...

No, penalties are for late return the 5% surcharge is for unpaid tax at the end of Feb irrespective of submission of tax return. Not on POA though just balance due at 31 Jan.
 


S

Springal

Well-known member
Feb 12, 2005
23,849
GOSBTS
Thanks all for the replies - but I am a bit lost still. Are you saying that I can POA for £0 for 2019/2020 on the basis I expect a rebate bigger than amount due this year for 2020/2021 without any impact?
 


Weststander

Weststander

Well-known member
NSC Patron
Aug 25, 2011
64,080
Withdean area
Springal said:
Thanks all for the replies - but I am a bit lost still. Are you saying that I can POA for £0 for 2019/2020 on the basis I expect a rebate bigger than amount due this year for 2020/2021 without any impact?
Click to expand...

Underpaying POA's will always result in a (daily pro-rated) interest charge of currently 2.6%. Whether the reason for underpaying be due to error, deliberate or unexpectedly higher income.
 




Tom Hark Preston Park

Tom Hark Preston Park

Will Post For Cash
Jul 6, 2003
70,246
Springal said:
It is that bit between Christmas & New Year where I get round to doing my tax return.

It appears I have underpaid tax through PAYE this year and I have a slightly larger than expected tax bill to be paid in January for 2019/2020. When completing the tax return it does give the option to claim to reduce 2020/2021 payments on account just before you submit.

I had planned to top up my private pension in March where I would get additional tax relief that would work back in my favour. Is this enough to 'reduce payments on account' to pay 0 in January, on the basis of a big rebate that will be due in 2020/2021?
Click to expand...

I could teach you, but I'd have to charge
 




Muhammed - I’m hard - Bruce Lee

Muhammed - I’m hard - Bruce Lee

You can't change fighters
NSC Patron
Jul 25, 2005
10,852
on a pig farm
Springal said:
It is that bit between Christmas & New Year where I get round to doing my tax return.

It appears I have underpaid tax through PAYE this year and I have a slightly larger than expected tax bill to be paid in January for 2019/2020. When completing the tax return it does give the option to claim to reduce 2020/2021 payments on account just before you submit.

I had planned to top up my private pension in March where I would get additional tax relief that would work back in my favour. Is this enough to 'reduce payments on account' to pay 0 in January, on the basis of a big rebate that will be due in 2020/2021?
Click to expand...

If you still need help, PM me. My missus is a tax consultant. Appreciate you may get advice on here, but she could offer cold hard (and accurate) facts.
Opinions are free, and often wrong....always seek professional advice. :)
 


N

NooBHA

Well-known member
Jan 13, 2015
8,584
Take a chance and reduce them down to Zero.

Then get ITR done early next year. The interest charged won't be much more than you would get by having funds in your own account.

There are ongoing discussions with HMRC and Government to potentially make it easier to get interest cancelled due to the large losses of income of many people due to Covid Lockdown. That hasn't been agreed as of yet but there have been indications during talks that this could change.
 




N

NooBHA

Well-known member
Jan 13, 2015
8,584
Muhammed (im hard) Bruce Lee said:
If you still need help, PM me. My missus is a tax consultant. Appreciate you may get advice on here, but she could offer cold hard (and accurate) facts.
Opinions are free, and often wrong....always seek professional advice. :)
Click to expand...


BensGrandad lived and died by advice given on all aspects of life on NSC. There is always someone on here who can solve people's problems. It's brilliant
 




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