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Posted Fri, 18 Nov 2022 15:26:04 GMT by Jay1
Hi, i am a self employed construction worker who has tax deducted weekly by contractor through cis, on my self assessment form my total tax due was £2792 on a self employed profit of £56172, (£43602 after deducting personal allowance) before submitting I double checked everything and realised I never ticked the child benefit over 50,000, so upon amending this it shows I have a higher income child benefit tax charge of £1114. And now it's saying tax due is by 31st of Jan is £5780?? It says 21-22 £3906 balancing payment 1st payment on account for 22-23 due 31 Jan23 £1874.01 Total due by 31st jan 23 £5780 But above this it says Note: 2nd payment of £1,874.01 due 31 July 2023?? I understand the charge of £1114 for the child benefit charge, but why would my tax bill jump from £2792 to £5780 instead of just £3906, and what is the extra 2nd payment of £1874 about? Thanks for any help
Posted Sun, 20 Nov 2022 12:56:49 GMT by Jay1
Ok, after a bit more digging and trying to understand the tax system I now know that the two payments on account are the amount of tax hmrc believe I will owe next year so they are charging me in advance, my issue now is that I believe the way things are looking ,next year 22/23 I won't owe any tax and will actually be owed a refund, so I am looking to reduce payments on account and set this to zero, my question is should I do this before I submit my tax return for 21/22 or should it be done after as I cannot afford to be paying £3748 up front even if it will be refunded eventually, as it is going to be a struggle to pay the £3906 owed for 21/22 let alone the extra, Thanks for any help
Posted Tue, 22 Nov 2022 13:44:18 GMT by HMRC Admin 17

Hi,
 
Payments on account should be set at 50% of the unpaid tax liability that will arise in 2022 to 2023. 

They are initially set at the levels based on your 2021 to 21/22 tax return. 

You can reduce your payment on account, howver, in doing so, you should be aware that over-reducing payments of account can give rise to late payment penalties and interest being charged. 

There are several way to reduce your payment on account. 

You can conact HMRC in may ways: write to HMRC BX9 1AS as well as sending form SA110 along with a paper tax return, submit form SA303 online at :

Self Assessment: claim to reduce payments on account (SA303)   ,

reduce the payments on account in the "view your calculation" of your online self assessment tax return and
phone the self assessment helpline on 0300 200 3310.

Thank you.

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