Quick SA tax question

[sgrimshaw]

If you submit your tax return before the 31st July 2nd POA date and the balance of tax due for the year (having not made POA 2) is less than POA 2 ... do you still need to make a payment on 31st July?

TaxCalc is implying the amount is due by 31st Jan 18 along with next year's POA 1.

[Eric Mc]

Yes and no.

If you get the return in NOW, HMRC MAY get the calculation changed in time to reflect the true liability. If you delay, or they take time top process the return, they will still expect the original POA amount to be paid. If you do have to pay the original POA, they will refund you the excess, with interest, as soon as they get the calculations done.

Did you know that there is always the option to reduce POAs if you realise they are too high? This can be done at any time.

[skahigh]

I've just done this.

My accountant submitted my tax return and told me to just pay the outstanding tax rather than the higher value of the original payment on account.

I can't see why HMRC would kick up a fuss about this given I've paid the correct amount of tax even if it's not what they are expecting?

[Eric Mc]

It's not about HMRC "kicking up a fuss". No human at HMRC will actually see these transactions.

What happens is that statements of account and calculations of underpaid tax liabilities are computed automatically and sent out to the taxpayer.

If you don't pay what they currently expect you to pay, there is a chance you will get a batch of demands for underpaid tax. If they take a long time to update the tax account, some of those demands may become threatening.

So - the trick is "playing the system" and ensuring you DON'T get HMRC sending out incorrect demands.

[sgrimshaw]

Thanks both.

The difference is less than £5k so not the end of the world.

I'll submit the return, then check on Monday to see if my account at HMRC has been updated with the true liability .. if not, then I will remit the POA 2

[Eric Mc]

As I said, they will refund any overpayments - with interest.