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SA Payments on account

SA Payments on account

What happens where an underpayment effectively means your payments on acount should have been higher ie: for underpayment interest purposes?

Eg :
Jan 01 - 1st on acct £1000
July 01 - 2nd on acct £1000

Say, before July 01 you know your final tax bill will be £3000, would you HAVE to pay the £2k with your Jul 01 payment OR pay bal of £1k in Jan02, thereby obtaining cashflow advantage. Any interest chargeable on shortfall ?


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12th Jul 2001 09:49

No interest!
On the assumption that the 2 payments on account have not already been reduced by an appropriate claim, the balance would be payable on 31 January 02, with no interest due up to that date. The £1,000 is not an underpayment. It is worth noting, however, that should the eventual liability prove to be less than £2,000 then, again assuming no claim has been made to reduce the interim payments, repayment supplement would be credited to date of repayment.

Hope this helps

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