Self assessment payment on account January 2021?
Discussion
I'm self employed and have a couple of DB pensions, total income (profit plus pensions) around £18k p.a.
I submitted my 2019/20 tax return in June, and paid what I owed in July. I didn't take up the offer of deferring payments under the coronavirus scheme, as I had the money saved up.
I was expecting to have to make a "payment on account" this month for the 2020/21 tax year, but haven't received anything in the post. I've just checked on the government gateway, and my current status is "nothing to pay".
I'm a bit confused why I'm not showing a payment on account as due by 31st January.
Has something gone wrong?
I submitted my 2019/20 tax return in June, and paid what I owed in July. I didn't take up the offer of deferring payments under the coronavirus scheme, as I had the money saved up.
I was expecting to have to make a "payment on account" this month for the 2020/21 tax year, but haven't received anything in the post. I've just checked on the government gateway, and my current status is "nothing to pay".
I'm a bit confused why I'm not showing a payment on account as due by 31st January.
Has something gone wrong?
It’s possible tax code was amended to capture the new fixed position.
Fill in 2019/20 before the end of Jan
Also assuming you’ve nothing but state pension and these pensions then you clearly know the total income. You also know the tax thresholds so can do the maths total income less £12.5k tax free threshold, that value needs to be taxed at 20% if that £ value is what you’ve paid you also know the check is correct.
Fill in 2019/20 before the end of Jan
Also assuming you’ve nothing but state pension and these pensions then you clearly know the total income. You also know the tax thresholds so can do the maths total income less £12.5k tax free threshold, that value needs to be taxed at 20% if that £ value is what you’ve paid you also know the check is correct.
I'm 63, so no state pension.
I took early retirement and I'm getting just under £8k pa from 2 company pensions. These are being paid without any tax being deducted since giving up my part time PAYE job in 2018.
Profit from self employment was around £10k for the last couple of years, and will be pretty much the same for 2020/21.
I'm expecting a tax bill for about £1400 (£1100 income tax and £300-ish NI) when I submit my 2020/21 return, so I thought I'd have to make a payment on account towards this by 31st January. That's what happened last year.
I took early retirement and I'm getting just under £8k pa from 2 company pensions. These are being paid without any tax being deducted since giving up my part time PAYE job in 2018.
Profit from self employment was around £10k for the last couple of years, and will be pretty much the same for 2020/21.
I'm expecting a tax bill for about £1400 (£1100 income tax and £300-ish NI) when I submit my 2020/21 return, so I thought I'd have to make a payment on account towards this by 31st January. That's what happened last year.
clockworks said:
I'm 63, so no state pension.
I took early retirement and I'm getting just under £8k pa from 2 company pensions. These are being paid without any tax being deducted since giving up my part time PAYE job in 2018.
Profit from self employment was around £10k for the last couple of years, and will be pretty much the same for 2020/21.
I'm expecting a tax bill for about £1400 (£1100 income tax and £300-ish NI) when I submit my 2020/21 return, so I thought I'd have to make a payment on account towards this by 31st January. That's what happened last year.
If you earn below £12.5k there is no tax. I took early retirement and I'm getting just under £8k pa from 2 company pensions. These are being paid without any tax being deducted since giving up my part time PAYE job in 2018.
Profit from self employment was around £10k for the last couple of years, and will be pretty much the same for 2020/21.
I'm expecting a tax bill for about £1400 (£1100 income tax and £300-ish NI) when I submit my 2020/21 return, so I thought I'd have to make a payment on account towards this by 31st January. That's what happened last year.
Welshbeef said:
clockworks said:
I'm 63, so no state pension.
I took early retirement and I'm getting just under £8k pa from 2 company pensions. These are being paid without any tax being deducted since giving up my part time PAYE job in 2018.
Profit from self employment was around £10k for the last couple of years, and will be pretty much the same for 2020/21.
I'm expecting a tax bill for about £1400 (£1100 income tax and £300-ish NI) when I submit my 2020/21 return, so I thought I'd have to make a payment on account towards this by 31st January. That's what happened last year.
If you earn below £12.5k there is no tax. I took early retirement and I'm getting just under £8k pa from 2 company pensions. These are being paid without any tax being deducted since giving up my part time PAYE job in 2018.
Profit from self employment was around £10k for the last couple of years, and will be pretty much the same for 2020/21.
I'm expecting a tax bill for about £1400 (£1100 income tax and £300-ish NI) when I submit my 2020/21 return, so I thought I'd have to make a payment on account towards this by 31st January. That's what happened last year.
Welshbeef said:
clockworks said:
I'm 63, so no state pension.
I took early retirement and I'm getting just under £8k pa from 2 company pensions. These are being paid without any tax being deducted since giving up my part time PAYE job in 2018.
Profit from self employment was around £10k for the last couple of years, and will be pretty much the same for 2020/21.
I'm expecting a tax bill for about £1400 (£1100 income tax and £300-ish NI) when I submit my 2020/21 return, so I thought I'd have to make a payment on account towards this by 31st January. That's what happened last year.
If you earn below £12.5k there is no tax. I took early retirement and I'm getting just under £8k pa from 2 company pensions. These are being paid without any tax being deducted since giving up my part time PAYE job in 2018.
Profit from self employment was around £10k for the last couple of years, and will be pretty much the same for 2020/21.
I'm expecting a tax bill for about £1400 (£1100 income tax and £300-ish NI) when I submit my 2020/21 return, so I thought I'd have to make a payment on account towards this by 31st January. That's what happened last year.
My income is around £18k - £7,800 pension plus about £10,000 profit from self employment.
There is no income tax deducted at source from the pension income.
In December 2019 I had to make a payment on account (due by 31st Jan 2020) towards the 2019/20 tax bill.
This year - nothing
There is no income tax deducted at source from the pension income.
In December 2019 I had to make a payment on account (due by 31st Jan 2020) towards the 2019/20 tax bill.
This year - nothing
Edited by clockworks on Monday 4th January 11:05
clockworks said:
My income is around £18k - £7,800 pension plus about £10,000 profit from self employment.
There is no income tax deducted at source from the pension income.
Total income less tax free threshold (as your only a basic rate taxpayer) gives you your taxable income There is no income tax deducted at source from the pension income.
How much tax have you paid
Compare that this calc that’s what is due. All else being equal.
Welshbeef said:
Total income less tax free threshold (as your only a basic rate taxpayer) gives you your taxable income
How much tax have you paid
Compare that this calc that’s what is due. All else being equal.
I don't owe anything from 2019/20, it's all been paid. No problem there.How much tax have you paid
Compare that this calc that’s what is due. All else being equal.
I'm just wondering why I don't have to make a payment on account towards the 2020/21 tax bill.
The Payment on Account for 2020/21 is based on the liability for 2019/20.
Example -
Self Assessment Tax Liability for 2019/20 - £3,000
1st 2020/21 Payment on Account - £1,500
1nd 2020/21 Payment on Account - £1,500
If the Self Assessment tax liability for 2019/20 is less than £1,000, no 2020/20 Payments on Account are required.
Example -
Self Assessment Tax Liability for 2019/20 - £3,000
1st 2020/21 Payment on Account - £1,500
1nd 2020/21 Payment on Account - £1,500
If the Self Assessment tax liability for 2019/20 is less than £1,000, no 2020/20 Payments on Account are required.
Eric Mc said:
The Payment on Account for 2020/21 is based on the liability for 2019/20.
Example -
Self Assessment Tax Liability for 2019/20 - £3,000
1st 2020/21 Payment on Account - £1,500
1nd 2020/21 Payment on Account - £1,500
If the Self Assessment tax liability for 2019/20 is less than £1,000, no 2020/20 Payments on Account are required.
That's the way I understood it to work after a bit of googling just now.Example -
Self Assessment Tax Liability for 2019/20 - £3,000
1st 2020/21 Payment on Account - £1,500
1nd 2020/21 Payment on Account - £1,500
If the Self Assessment tax liability for 2019/20 is less than £1,000, no 2020/20 Payments on Account are required.
My tax bill for 2019/20 was £1095, but it looks like I "overpaid" the previous year because I gave up my PAYE job in October 2018, and tax was still being deducted at source from my pensions. This meant I didn't use up all my personal allowance for 2018/19 and maybe 2019/20 (I think).
This "overpayment" meant that I only had to pay £615 for 2019/20, which I paid in full in July 2020 (I didn't take the coronavirus deferment option).
I guess this means that, as far as the HMRC system is concerned, my tax bill for 2019/20 was only £615, so there's no payment on account required for 2020/21.
Welshbeef said:
Genuine question why would you want to pay more tax (even if due) in advance of Jan 2021?
I have savings accounts set up to cover annual bills like tax, car tax/insurance/servicing, business insurance, heating oil, etc. I have standing orders set up to pay into these accounts each month. Despite shuffling money around, after the first year, these savings accounts are earning next to no interest - mostly 0.01% right now. There's nothing to be gained by hanging onto the money, so I pay bills as soon as they arrive. It saves me forgetting to pay and getting hit with penalties, and makes it easier to see my financial position.
I have a notional amount in savings that, in my head, is enough to see me through to state pension age should the worst happen. Anything above that amount is mine to spend on "toys". When I get to state pension age, as well a copping for for the £150-odd a week, one of my company pensions gets back-indexed and should more than double (the other, smaller, one is indexed each year). My total pension should be just over £20k a year, so I could pack in the self employment if I wanted to and live comfortably. In reality, I'll carry on working for as long as I enjoy it, and my eyesight allows.
TLDR: I don't like owing money, and like to know where I stand each month.
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