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Posted Thu, 08 Dec 2022 13:25:04 GMT by CCBL
The 2020/2021 tax year was the first time that I'd made sufficient taxable income to take me above the imposed threshold to be liable to make payments on account. I made my first 2 payments on account - one in January 2022, followed by the mid term 2nd payment in July 2022. Now when I'm completing and submitting my 2021/2022 self assessment, the calculation of my tax liability makes no reference to or deduction of these "payments on account". I've looked at similar posts on this issue on this forum, so I think I know the answer, but I would like to formally post my own submission. My question is - will the payment you are holding be automatically deducted or will I need to manually reconcile this myself and deduct the "credit" from the tax I owe before I make payment ? Also - do you pay interest on the not insignificant amount that you've been holding for the last 6 to 12 months ?
Posted Mon, 12 Dec 2022 11:13:18 GMT by HMRC Admin 32
Hi,

The tax calculation does not include anything you have already paid. It is there to show the full tax liability for the year. You need to deduct the amounts you have paid already from the amount due. Any remaining amount will be due as a Balancing Payment by 31 January 2023.

There would only be a repayment supplement due to you if the Payments on Account had been calculated too high.

Thank you.

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