# Personal Tax HELP!!!

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Registered Posts: 50 Epic contributor 🐘
Hi all

Just a quick question which may sound silly but I do not know the answer.

For the 3 installments to pay your tax how much do you actually pay on these three occasions?

So the 3 installments are;
Jan in tax year
July after tax year
Jan after tax year

Thought I better ask this question as I have my exam nest Thursday and a question like this was on the practice assessment online.

• Registered Posts: 782
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Hi,

Assuming its not the first year of trading, the first 2 instalments are both 50% of last years total bill. Therefore in a perfect world with constant yearly profits, there would be no remaining balance to pay in the final January, however in practice there is likely to be a under/over payment to deal with.

And of course, in that final January payment you are also paying the first instalment of the current years payment (which will be 50% of the total bill you've just dealt with).

I can demonstrate with numbers if I've just confused you even more.
• Registered Posts: 38 Regular contributor ⭐
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I did the exam 4 weeks ago and it had multiple years we had to calculate. As NPS said one Jan Payment may include 2
payments.
Good Luck for Thursday
• Registered, Moderator Posts: 1,368
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Hi,
agree with Nps1976;
For example you pay in January 2013 the final balance for the tax due in 2012 + 1st POA for tax due in 2013 (50% of 2012 tax bill).
• Registered Posts: 50 Epic contributor 🐘
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Hi

Can anyone demonstrate this with numbers please so I can understand clearly. A question with multiple years would also be helpful.

Thank you

• Registered Posts: 782
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Take a Jan-Dec year.
Year ending 2000 - tax due £1200
Year ending 2001 - tax due £1500
Year ending 2002 - tax due £1800

Let's assume the 1999 year resulted in £1000 tax to pay.

Jan 2000 - £500 (50% of last years bill) (but remember any extra 1999 balancing payment would also be due
July 2000 - £500 (50% of last years bill)

Jan 2001 - The balancing payment of £200 (1200 - 500 - 500) to clear the year 2000 bill, plus £600 (50% of last years £1200 bill) to start off this year
Jul 2001 - £600 (50% of last years bill)

Jan 2002 - £300 balancing payment to clear the 2001 bill, plus £750 (50% of last years £1500 bill)
Jul 2002 - £750 (50% of last years bill)

Now you try the Jan and Jul 2003 payments.........
• Registered Posts: 50 Epic contributor 🐘
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Ok so...

Jan 2003 would include a balancing payment of £300 to clear 2002 bill of £1800 and £900 to start of this year.

July 2003 would be £900.

Is that correct!!
• Registered Posts: 782
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Don't know what you're worrying about! You've got it.
• Registered Posts: 50 Epic contributor 🐘
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Thank you so much for all your help that explained why I got in wrong in the practice assessment.

As I don't think we went over this in class, which is a bit bad, so I thought you had to split the tax amount between 3 for each instalment. XD

Thanks again.

• Registered Posts: 1,189 Beyond epic contributor 🧙‍♂️
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Don't forget if they through Capital Gains into the equation you can not pre pay that you make a full payment in the final payment .

Good luck

I have mine in 2 weeks
• Registered Posts: 50 Epic contributor 🐘
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Hi

Thank you for that extra bit of information.

Good luck for when you take the exam.