Payments on account after tax code change

I did a self assessment return for 2022/3 in August and as I have property income, there was substantial tax owed. As well as the outstanding amount, the "View your calculation" page also said "payments on account" would be due for 2023/4 in Jan 2024 and July 2024, which I understand to be due to this excess. Fine. But then my PAYE tax code was changed to reduce my tax free amount to collect the extra expected tax from property income. This didn't take into account the payments on account. So if I make the payments on account, I will end up paying far more tax in 2023/4 than I should. I was wondering am I actually still expected to make these payments on account for 2023/4 now that my PAYE tax code was adjusted? If so, is it right that they weren't taken into account in my new tax code?

Hi Pagw,
Based on the information you have provided you can either ask us to reduce your payments on account or remove the income from property from your current tax code.
You should bear in mind that if you reduce your payments on account by too much, you will be charged interest on the original amounts.
Please see:
Understand your Self Assessment tax bill
Thank you. 

 

Thanks for the response. I looked at submitting a reduced estimate of property profit at the form at https://www.tax.service.gov.uk/digital-forms/form/tell-us-about-other-income/draft/guide, but there is only space to enter the number and not explain where it is coming from. At the end it asks me to declare that the information entered is correct, and I wanted to check would there be any problem with me entering a property profit number lower than what I declare in my 2023/4 self-assessment, if the payments on account cover the tax on the rest?

Hi,

No, as when you submit the 2023 to 2024 tax return you will be declaring the actual figures and the calculaton will reflect this. 

Thank you.

OK, given it sounds risky to ask to reduce the payments on account if I miscalculate those, can you please tell me how do I ask HMRC to "remove the income from property from [my] current tax code"? I can't see a place to do this in the personal tax account pages.

Hi Pagw, I'm not HMRC and can't see your latest post yet (awaiting approval) so I'm responding to your previous post (dated 11 days ago as of now). What you need is here: https://www.gov.uk/government/publications/self-assessment-claim-to-reduce-payments-on-account-sa303 You'll need to first calculate whether you will have tax to pay when you file your 23/24 return. If you do, regardless of why the underpayment has occurred and any changes to your tax code, payments on account will still be required. You could wait a while before reducing them so there is more certainty as you'll know how much you've earned and paid in tax for say 9 months if you do it in December so only have to estimate for the 3 months remaining of the tax year. You can also submit the 23/24 return as early as 6th April (if you're able to/have all the info you require) and it will adjust the payments on account to the correct amounts. If you reduce them by too much then interest would apply from the due date so by submitting the return as early as possible, you can get it paid off and minimise the interest. Hope at least some of that helps!

Thanks Bella. Yes I might try that if I don't get anywhere with getting my tax code adjusted.

Hi Pagw,

You would need to contact HMRC to remove.

Contact HMRC

Thank you.