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  • RE: First payment on account for 2023-24

    Hi HMRC Admin 19, thank you for your reply, however I would appreciate it if I could just understand the principle when the overpayment deduction is applied, possibly without accessing the Self Assessment page. Would you be able to advise? I have reviewed the "Understand your Self Assessment tax bill" guidance, but unfortunately, it does not specify this particular step. Just to clarify Should I: A) Double my income tax from the previous year and then subtract the overpayment, to find out what tax I owe or B) Subtract the overpayment from my current income tax and then double the result? Any advice or clarity on this matter would be greatly appreciated. I am hoping to ensure that I understand the process correctly and complete my tax assessment accurately. Thank you for your time and assistance.
  • RE: First payment on account for 2023-24

    Dear HMRC, I am writing to seek clarification on how to adjust my tax payments for the upcoming year, taking into account an overpayment from the last year. For the previous tax year, my total tax liability was £3,000. However, I made two payments on account amounting to £6,000 (£4,500 by 31 January and £1,500 by 31 July, which I have already paid). This results in an overpayment of £3,000 on my account. My tax liability for this year is £5,000. I am trying to understand how to account for the £3,000 overpayment in calculating my payments on account for the next tax year (2024/25). Specifically, I am unsure which of the following options is correct for calculating my payments due on 31 January 2025 and 31 July 2025: Option A) Deduct the overpayment from this year's liability before calculating the payments on account, resulting in two payments based on a reduced liability of £3,000. Example: £5,000 (tax liability) - £3,000 (advancement)= £2,000*2 = £4,000 which would result in £3,000 by 31/01/2025 and £1,000 by 31/07/2025 Option B) Calculate the payments on account based on the full liability of £5,000 for this year, and then deduct the overpayment from the total amount due for the year. Example: £5,000*2=£10,000 - £3,000 (advancement) = £7,000 which would result in £5,250 by 31/01/2025 and £3,500 by 31/07/2025 Could you please advise on the correct approach to take in this situation? Thank you for your assistance.