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Payments on Account that were reduced by too much

Payments on Account that were reduced by too much

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Q: What happens in this scenario: Payments on account towards 2015/16 were innocently reduced to £200 each. On 31 Jan 2016 £200 was paid. Meantime, May 2016 ITR for 2015/16 submitted showing tax bill £800.

Will the next payment due be £200 on 31 July, then the balancing £400 on 31 Jan 2017?

Or will the next payment due be £600?

Thanks.

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RLI
By lionofludesch
16th May 2016 17:20

No £200 + interest will be due now, £400 on 31 July. That's assuming that the original POAs were more than £400 apiece. Which is the crucial bit of information you omitted.

However, I'm guessing that's so because if the 2014/15 liability was less than £1000, there wouldn't be any POAs.

Thanks (1)
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By Chipette
16th May 2016 17:24

What was the original POA before it was reduced? Interests will be calculated on the difference between original POA and new POA from 31st January and again from 31st July.

Thanks (1)
Replying to Chipette:
By chewmac
16th May 2016 17:43

Thanks. Original PoA's were £600 a piece, then reduced to £200 each.

Thanks (0)
Replying to chewmac:
RLI
By lionofludesch
16th May 2016 17:58

Thought so.

There are no grave consequences here. No penalties, interest minimal.

Thanks (1)
Replying to Chipette:
RLI
By lionofludesch
16th May 2016 17:59

Chipette wrote:

What was the original POA before it was reduced? Interests will be calculated on the difference between original POA and new POA from 31st January and again from 31st July.

Not the original POA - the reduced POA, surely ?

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Replying to lionofludesch:
avatar
By Chipette
16th May 2016 18:01

Yes you are right. I just assumed the original POA was the correct amount due.

Thanks (1)
Replying to Chipette:
By chewmac
16th May 2016 18:18

This all makes sense. Thanks very much to both.

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