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Posted Tue, 09 May 2023 14:27:32 GMT by Roy_F
Hi, I am filling in my SA and the calculation shows "Payments on account" for the next tax year. As I understand it from reading the help, that figure is based on the underpayment this year. (The first installment is 50% of that figure) I suspect this will be a very naive question, but, the tax will not be due until 6 months after the first "Payments on account" has been deposited, will I receive any interest on it? If not, am I allowed to request it is reduced to zero, so I can put it in a savings account paying the whole amount of tax when it is due? Obviously, I would be paying tax on that interest, so both HMRC and I would be better off that way. Thanks.
Posted Mon, 15 May 2023 14:38:10 GMT by Roy_F
Found the extra box with info explaining about calculating how to request a partial reduction and I don't really understand it. So I think my best bet in terms of not losing out too much interest from my bank, is just to pay each amount on the date it's due and suck up the loss of 6 months' bank interest on it.
Posted Tue, 16 May 2023 10:11:33 GMT by HMRC Admin 5

You do not need to pay the payment on account until the due date. If you you pay it after this date you will be charged interest.

Thank you.
Posted Tue, 16 May 2023 11:29:00 GMT by Roy_F
Hi HMRC Admin 5 I was hoping to pay nothing until the 23/24 SA was submitted and then pay the total amount on the due date. In simple terms, the way I understand it. I have to pay half of my *potential* tax bill, six months before the actual tax bill amount is calculated. If the actual tax bill is zero, you just give me the money back. Where I could have earned 5% interest on the amount in a savings account over those 6 months. If the actual tax bill is as estimated and I pay it in one sum on the due date, at least then I have the interest earned over a full year. I'm happy to pay all the tax I owe for 22/23 on the due date, why can I not pay all the tax I owe for 23/24 on it's due date? *when I say "happy", begrudgingly may be a better description :)
Posted Tue, 23 May 2023 09:42:03 GMT by HMRC Admin 32

The Payments on Account are mandatory if you meet the criteria. If you submit your tax return early this will confirm how much is due for the 2022 to 2023 year and if the Payments on Account are too high they will be adjusted.

Thank you.

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