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Posted Sat, 20 Jan 2024 12:23:22 GMT by
When I completed my 2021/22 self-assessment, the system proposed using the 2021/22 amount to calculate my two payment on account amounts for 2022/23. I checked the box to request this amount was reduced, entered a new amount of zero, and explained that I had left my job in 2022/23. I waited the usual 72 hours and the self-assessment site said the amount owing was the total amount for 2021/22 and nothing more (this was on 3 Jan 2023). I paid the amount shown in my online self-assessment account in full on the same day. In December 2023, I went back into the self-assessment site and no payment was listed as due. I completed my 2022/23 self-assessment, waited the usual 72 hours and then on 7 Dec 20 23 I paid the full amount shown as due, which was the amount calculated for 2022/23. I have now (20 Jan 2024) received a letter from HMRC showing a list of payments due and paid, which says "Interest is running on the amount to pay. Please pay it now". The letter says nothing else. The list of payments in this letter includes two payments on account due on 31 Jan 23 and 31 Jul 23 that are each exactly half the amount that my 7 Dec 23 self-assessment showed I owed for 2022/23. Neither I nor the HMRC knew this figure before 7 Dec 2023 and HMRC certainly did not request these two payments at any time before today nor were they shown in my self-assessment account when I accessed it in December. Interest payments are today showing in my online self-assessment account that were apparently calculated in Feb23, Apr23, May23, Jul23, Aug23 and Dec23 but they were not shown in my account on 7 Dec 23 and I have received nothing about this until today (20 Jan 2024). The system itself shows these amounts were added by HMRC on 11 December 2023. Can HMRC charge me interest on payments on account that it did not request or even calculate until over 10 and 4 months after those amounts would have been due had HMRC asked for them?
Posted Fri, 26 Jan 2024 06:48:57 GMT by HMRC Admin 25
Hi Cath M,
Your Payments on Account are a prediction of the tax you will owe for the next tax year.
If you reduce your Payments on Account to 0.00, you are declaring that you do not expect to owe any tax for that year.
If the amount you expect to owe changes during that tax year, if you take on new employment, for example you can contact us to increase your Payments on Account again.
Your first Payment on Account, reflecting 6 months worth of tax, is due on the 31st of January, which is 10 months into the tax year.
It is due for, regular PAYE taxpayers pay tax immediately from their wages, every week or month, and with no opportunity to amend the amount they pay.
If the amount you amended your Payments on Account to turns out to be an inaccurate reflection of the tax you would have been paying in-year, interest is charged on the difference.
Payments on Account are explained here:
Understand your Self Assessment tax bill
Thank you. 

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