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Tax Payments on Account

Tax Payments on Account

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I have a self-employed client who had no tax payments on account due during 2013/14 as his taxable profits for 2012/13 were below £1,000.

His taxable profits for 2013/14 exceed £1,000 so he would normally have On Account payments due on 31/1/15 and 31/7/15 re his 2014/15 year.

However, during 2013/14 he has made monthly payments on account to HMRC which bring his tax due on 31/01/15 re his 2013/14 tax year below £1,000.

My question is, will he have Payments on Account due re 2014/15 as his 31/01/15 payment is now less than £1,000? (My computer software indicates he will not, although I may have entered the payment on account details incorrectly!).

I hope I have explained this clearly and not mixed up any of my tax years!

Thanks in advance for your replies.


Replies (5)

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By johngroganjga
18th Nov 2014 08:04

You seem to be saying that your client has made early voluntary payments of his 2013/2014 liability.

I don't think they enter into the calculation of whether he has to make POA's for 2014/2015, any more than they would if he had been obliged to make them.

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By stepurhan
18th Nov 2014 08:24

Payments on Account

The trigger for payments on account is the total tax liability for the year being over £1,000. The amount of this liability still outstanding at 31 January is irrelevant. If your software is saying otherwise, then you either have rubbish software, or you have entered something incorrectly.

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By johngroganjga
18th Nov 2014 08:31

Total tax liability

To be more specific - this is after deducting tax paid under PAYE, tax deducted from interest received, tax credits on dvidends etc. but before deducting payments on account, whether required or voluntary.

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By stepurhan
18th Nov 2014 08:57

One more caveat

Thanks for clarifying that john.

There is one more possibility. If more than 80% of tax is taken up-front (through PAYE or tax deducted at source on interest, etc) then there are also no payments on account. But that is only the tax automatically taken by the tax system, not payments on account voluntary or otherwise.

HMRC Manual on POA : Not moved to Gov.UK yet.

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By Darren Loring
18th Nov 2014 12:03


That clarifies what I thought.

I use Digita software which is usually reliable so it is probably me who has made an error in the location I have posted the on account payments.

Thanks everyone.

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