Payments on Account (SA Tax)

[Mogul]

Logged in to HMRC Gateway and set up the required 31/01 payment. So far, so good.

However, it won’t let me pick a date beyond 31/01 for the Payment on Account, despite the fact that it isn’t due until 31/07…

What gives?

[Eric Mc]

You don't "set up" Payments on Account. They are set with reference to your previous year's tax liability.

If (say) your Self Assessment bill of 2022/23 was £2,500, then the two Payments on Account for 2023/24 will be automatically set at £1,250 each, the first being payable on 31 January 2024 and the second £1,250.00 being payable on 31 July 2024.


If you know that your actual 2023/24 tax liability is going to be lower than £2,500 you can apply to have the 2023/24 Payments on Account reduced to a more realistic level - even Nil if appropriate. The application to reduce Payments on Account can be made at any time.

[Mogul]

I’m cool with the requested Payment on Account (due on 31/07/24).

I just wanted to cue-up/schedule the payment today and spotted the ‘pay on a future date’ option via Gateway.

However from what I could see, they don’t let you pick a future date beyond 31/01/24!

I guess I’ll just have to make a note to log on again (in Feb) and try to schedule the payment then.

[Eric Mc]

31 January is a fixed date for the first Payment on Account. If you pay the amount that you should have paid on 31 January after that date, you will be charged interest.

[Mogul]

I simply want to schedule the second payment of account which is due on 31/07/24.

[Pieman68]

Eric Mc said:

31 January is a fixed date for the first Payment on Account. If you pay the amount that you should have paid on 31 January after that date, you will be charged interest.

OP, afraid I can't help as SA is a mystery to me at the minute and I'm just trying to get my head around it (with apologies for the hijack)

Currently PAYE but looking to go self-employed in the new year. Presumably if I start in March (realistically the earliest start date) I inform HMRC of the date I start. This would then mean filling in an SA form in Jan 2025 to cover the combination of PAYE and SA for the end of the year I presume. How does payment on account work in those circumstances?

If I wait until April 1st to go self-employed, I presume I still tell HMRC the date - does that mean no SA form until Jan 2026? Do I then pay the full amount for FY 24/25 and a payment on account for 25/26?

Thanks in advance for any help that you can offer

[Eric Mc]

Pieman68 said:

OP, afraid I can't help as SA is a mystery to me at the minute and I'm just trying to get my head around it (with apologies for the hijack)

Currently PAYE but looking to go self-employed in the new year. Presumably if I start in March (realistically the earliest start date) I inform HMRC of the date I start. This would then mean filling in an SA form in Jan 2025 to cover the combination of PAYE and SA for the end of the year I presume. How does payment on account work in those circumstances?

If I wait until April 1st to go self-employed, I presume I still tell HMRC the date - does that mean no SA form until Jan 2026? Do I then pay the full amount for FY 24/25 and a payment on account for 25/26?

Thanks in advance for any help that you can offer

When you say, "self employed", do you intend to operate as a "sole trader"? In other words, you are NOT setting up a limited company through which you will be trading?

YHM

Edited by Eric Mc on Tuesday 10th October 09:48

[Pieman68]

Eric Mc said:

Pieman68 said:

OP, afraid I can't help as SA is a mystery to me at the minute and I'm just trying to get my head around it (with apologies for the hijack)

Currently PAYE but looking to go self-employed in the new year. Presumably if I start in March (realistically the earliest start date) I inform HMRC of the date I start. This would then mean filling in an SA form in Jan 2025 to cover the combination of PAYE and SA for the end of the year I presume. How does payment on account work in those circumstances?

If I wait until April 1st to go self-employed, I presume I still tell HMRC the date - does that mean no SA form until Jan 2026? Do I then pay the full amount for FY 24/25 and a payment on account for 25/26?

Thanks in advance for any help that you can offer

When you say, "self employed", do you intend to operate as a "sole trader"? In other words, you are NOT setting up a limited company through which you will be trading?

YHM

Edited by Eric Mc on Tuesday 10th October 09:48

Correct Eric, I will be a sole trader