Payments on account

Payments on account

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Just completed my first 2014/ 2015  SA tax Return

Client is a PAYE tax payer earning about £17,000. She owes £1500 which will be coded out in 2016 / 2017 but software is showing payments on account as being due. I may be having a dumb moment but I'm sure in previous years coding out the balancing payment also eliminated POA.  

Are the POA's correct ?  phoned HMRC and chap said they were but I don't have a lot of faith in the Agents helpline when asking this sort of question

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By stratty
27th Apr 2015 17:41

PAYE / SA

Is PAYE the only source of income for this client?

 

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Replying to Izabella8:
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By frankdavid
27th Apr 2015 20:30

yes,but a bit unusual in that all earnings in 14/15 all put into pension

 

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By stratty
28th Apr 2015 08:39

Tax Return

Why does the taxpayer have to complete a tax return and are you sure the original return is correct.  Something doesn't sound right with the figures you quote in the original post.

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By JCresswellTax
28th Apr 2015 09:12

The reason payments on account are showing

Is that it isn't possible to collect a £1,500 tax liability through a tax code when the PAYE earnings are only £17k.

This breaches one of HMRC's criteria for collection by code, i.e. that the underpayment is more than the liability to be collected via PAYE for the year.

Your client has no option but to pay the tax by 31st January 2016 in full.

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By frankdavid
28th Apr 2015 12:20

Sorted, had a software update from Keytime (also had one yesterday) and re running the calculate function shows the payments on account have now been removed, I didn't have such a dumb moment after all.

 

Thanks for suggestions

 

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By JCresswellTax
28th Apr 2015 12:26

Didn't you read my reply?

The coding out will be rejected and the payments on account reinstated.

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