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Do payments on account automatically update?

If you file a tax return before POA are due do they automatically update to the higher amount?

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A client of mine has her second payment on account of £23k due for 18/19 on 31st July, however the year has been much better that she expected and her total tax bill is nearer £80k.

She would like to file her 18/19 return as soon as possible as she is applying for a new mortgage and wants to show the higher income, but she is not in a position to pay £40k by 31st July.

If we file the tax return before 31st July showing a total of £80k tax for the year, does the POA stay the same at £23k?  Or will it automatically update for the filed amount and HMRC be expecting £40k?  

Many thanks

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24th Jun 2019 17:43

Provided you haven't previously reduced them from what they were, based on 2017/2018, they stay the same at £23k.

Thanks (2)
24th Jun 2019 18:40

We've only had payments on account for 22 years. Apart from a change in the de minimis limit from £500 to £1000, the system's been unchanged as far as I recall.

Why the doubt now ? We've had a couple of similar queries recently.

Thanks (2)
to lionofludesch
25th Jun 2019 08:49

It worries me that a professional even needs to ask this. If the basics are so lacking, what hope for more complex stuff?

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By AW71
25th Jun 2019 09:12

I'm concerned somebody in practice doesn't know the basic principles of payments on account.

Thanks (1)
25th Jun 2019 09:15

Im not concerned, nothing to do with me.

However, i think you need to read the payment on account rules, in particular, what year the July19 payment on account relates to.

Thanks (1)
25th Jun 2019 09:28

I was surprised that the January 2019 POA wasn't considered. If the July one is to be increased, the January one should be too.

Muddled thinking, I'm afraid.

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By SXGuy
25th Jun 2019 09:57

Not heard of balancing payments then? Shocking.

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to SXGuy
25th Jun 2019 10:04

What's shocking is that this taxpayer has a tax bill of £80,000.

Deserves better advice. POAs aren't rocket science.

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By AW71
25th Jun 2019 10:15

And this thread comes from a person complaining about QBE accountants
https://www.accountingweb.co.uk/any-answers/do-you-have-to-be-qualified-...

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