Practice 1 - task 6a

katelowes

Hi, could anyone explain the balancing payment? I understand the 20/21 payment

Pian32

31st January 2021 - Balancing Payment for the 19/20 year - £1004
31st January 2021 - Payment on account for the 20/21 Year - £2930
31st July 2021 - Payment on account for the 20/21 year - £2930

So the balancing payment assuming all payments on account have been made is effectively

Tax Calculated for year X - Tax calculated for Year (X-1)
5860-4856 = 1004

Payments on account are simply half of the tax for the year just gone.
2021 year payment on account so 19/20 tax divided by 2
5860/2 = 2930

katelowes

Thank you! Makes sense