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Payments on account - claim to reduce and interests

Payments on account - claim to reduce and...

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Good afternoon,

An individual (additional rate tax payer) filed his own SA return for 2013/14 - main income was PAYE but he also exercised some options (non RCA) so an income tax charge of 60k was added to tax due. He was requested to make two payments on account of 30k but claimed to have this reduced to nil as this income tax charge was an one off. 

Over the years he always has had to pay extra tax between £500 and £3000 (some rental income and child benefit claw back) but PAYE well over 80% of total tax.

Tax return 2014/15 filed at the end of September 2015 with a tax due of £2400.

He has now received his statement showing 2 POA of £1200 overdue (for Jan 2015 and July 2015)+ £35 interests. He has asked me if there were any grounds for him to ask HMRC to waive the interests since he has never had to make POA in the past.

I am not very hopeful but just thought I would put it to the AWeb community. Thanks in advance for your comments.

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Euan's picture
By Euan MacLennan
28th Oct 2015 13:58

No grounds for appeal

... because he has reduced the POAs to less than the tax eventually due.  If he has always paid tax of between £500 and £3,000, he would have been well advised to reduce his POAs only to £3,000.  As he does not usually have to pay POAs, I am afraid that he has been caught out.

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By Chipette
28th Oct 2015 14:02

Thanks Euan

he will just have to pay the whole extra £35 then ;-)

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By janewanless
28th Oct 2015 20:40

Can he not request that the 2014/15 tax be collected by coding adjustment in 2016/17?  Not possible if his PAYE income has ceased, but if it can be done, his payments on account should reduce to nil, and the interest would consequently disappear. 

When the return is filed before 30/12 I've know HMRC agree to coding the underpayment, where possible, over the phone

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By SteLacca
29th Oct 2015 09:21

I'm not so sure

janewanless wrote:
Can he not request that the 2014/15 tax be collected by coding adjustment in 2016/17?  Not possible if his PAYE income has ceased, but if it can be done, his payments on account should reduce to nil, and the interest would consequently disappear.

 

I'm not so sure they would. The POAs arise from the 2014 Return. Had that been coded then the POAs would not have arisen, but since it wasn't, then they are properly due and late.

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