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Time To Pay Arrangements for January 2021

HMRC including July 2021 POA

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My client wants to pay his January 2021 tax bill by 12 monthly instalments. When he tries to do this online it is including not only the balance outstanding from 31/1/21 but also the estimated POA due on 31 July 2021. He phoned HMRC and they confirm that this should be included in setting the level of instalments.

This is not what I understood would happen and I can't see anything regarding this in the guidance. Is this how other people expect the instalment plan to work?

For my client with zero income and only the SEISS grants to rely on, adding £100 to his monthly instalments for a sum that is not yet due is tough to swallow.

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By Not Anonymous
22nd Feb 2021 12:43

sijolees wrote:

My client wants to pay his January 2021 tax bill by 12 monthly instalments. When he tries to do this online it is including not only the balance outstanding from 31/1/21 but also the estimated POA due on 31 July 2021. He phoned HMRC and they confirm that this should be included in setting the level of instalments.

This is not what I understood would happen and I can't see anything regarding this in the guidance. Is this how other people expect the instalment plan to work?

For my client with zero income and only the SEISS grants to rely on, adding £100 to his monthly instalments for a sum that is not yet due is tough to swallow.

Do you mean that adding £100 to each instalment would mean he is in credit before 31 July?
Or will he still be in arrears?
This seems fairly clear
https://www.tax.service.gov.uk/pay-what-you-owe-in-instalments?

Thanks (1)
By K81
22nd Feb 2021 12:49

I think its because the second payment on account would become due during the 12 months that your client wants to spread the payment over.

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By Duggimon
22nd Feb 2021 13:16

Perhaps if he agrees to split the January payment over 12 months but pay the July payment in full when it falls due, HMRC might agree to that.

That would of course leave your client worse off so is probably not worth arguing over.

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By insolventnl
22nd Feb 2021 13:41

You can elect to reduce future POA if you know that the income is/was significantly lower then the year just completed. Maybe that might help

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Replying to insolventnl:
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By sijolees
22nd Feb 2021 13:57

I have already reduced the POA due based on an estimate of the 4 SEISS grants.

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By sijolees
22nd Feb 2021 13:45

Thanks for the responses. I just think they should deal with January and then deal with July. I can see the logic of giving clients the option of rolling the two payments into one instalment plan, but to give no choice in the matter seems odd.
And they could include this in their guidance if this what they are doing - no mention of this here:
https://www.gov.uk/pay-self-assessment-tax-bill/pay-in-instalments

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By sijolees
22nd Feb 2021 14:18

This is from the press release when this was announced -

"As part of his speech, the Chancellor announced that Self Assessment customers could pay their deferred payment on account bill from July 2020, any outstanding tax owed for 2019 to 2020 and their first payment on account bill for this current tax year in monthly instalments, up to 12 months, via this self-serve tool."

Nothing about POA2. Are HMRC just changing the goalposts as we go along?

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By jonharris999
22nd Feb 2021 14:19

Including the July POA in a (say) February payment makes no sense in logic or law, but that doesn't appear to be stopping them. They are only too happy to use their discretion when it suits them and say that they have none when it doesn't.

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By SXGuy
23rd Feb 2021 06:41

Time to pay has always included poa for the year. So unsure why it's such a shock.

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Replying to SXGuy:
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By sijolees
23rd Feb 2021 10:10

Because this what was announced as being spread over 12 months: "outstanding tax owed for 2019 to 2020 and their first payment on account bill for this current tax year". Nothing about PoA2 being added in to the calculation.

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