Payments On Account

lizzy

Hi, I am looking for some advice, just to ensure I am correct. AAT studies covered payments on account but it seems so different when you actually do it.

Please can anyone asure me that this is correct:-

Your have tax for 2008/2009 (6000) which was due & paid by 31/01/10 which resulted in a 1st POA (3000) being due & paid by 31/01/10 therefore meaning £3000 was also due by 31/07/10.

But you have now done your 0910 tax return & tax due after cis deductions is £200 for 0910

So therefore the 2nd POA for 31/07/10 is not actually due & a refund is due of £2800 from the Jan POA??

JodieR

Correct. If you knew that the 2009/10 tax was going to be that much lower you could have asked for the payments on account to be reduced to avoid paying out so much that you knew would be refunded.

A-Vic

Agreed

http://www.hmrc.gov.uk/sa/forms/sa303.pdf

lizzy

Thank you for your replies.

Yes I thought you could do that but have only just found out how low the profit was for 09/10.

So I presume now I submit the return online & then apply to reduce the payments on account to nil & also request a refund??

JodieR

the payments on account will automatically recalculate when you file the return, and if you fill in the bank details on the return then the refund is usually made automatically but sometimes you do need to request it.

Caspar

Hi
A client of mine was due a refund in January, and only received it (after much chasing), in May. I would still submit a reducing payments on account form now, so that if the repayment is not made in time, reminder letters and penalty notices will not be issued. I know these would be removed, once the SA updates the system, but in my opinion, it saves a lot of hassle from the client, thinking you haven't done your job.
Regards
Caspar