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Sam, Accountant
Category: Tax
Satisfied Customers: 14157
Experience:  26 HMRC expertise, PAYE, Self Assessment ,Residency, Rental Income, Capital Gains, CIS ask for Sam Tax
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On self assessment tax returns the final section states the

Customer Question

On self assessment tax returns the final section states the tax due for the year as xxx and adds on two payments on account of half xxx for the next year. If the tax due at the end of the second year is yyy can the amount paid on account be subtracted, so only xxx-yyy is paid?
Submitted: 1 year ago.
Category: Tax
Expert:  Sam replied 1 year ago.


Thanks for your question - I am Sam and I am one of the UK tax experts here on Just Answer.

At this stage the self assessment does not take into account anything that might have been paid - it just reviews the year as a stand alone position as to the overall tax liability for that year.

And if that total liability is more than £1000 then the calculation will then also ask for 2 payments on account - onbe becoming due at the same time as the years tax bill (so at 31st Jan) and the other becoming due at 31st July.

IF you have alreadt made payments on account leading up to this assessment (so on 31/01/2016 and 31/07/2016) then once your self assessment return has been processed (either online or by HMRC if you are sending in a paper return) then the tax liability may reduce IF you have paid more than is due but the payments on account will still arise IF the total liability is more than £1000 as this is how self assessment works.

IF however your liability before payments made have been taken into account is less than £1000 - then you will get a refund and will NOT be expected to make payments on account.

The other option is that IF your liability is more than £1000 so a payment on account is due for 31 Jan and 31st July, but you feel your tax liability by the end of this year will be LESS then you can ask for those payment on accounts to be reduced accordingly, BUT two payments still are made at 31 Jan and 31st July - juts at a lesser amount OR if you pay what is asked for - then you will be a refund situation at the year end - but once again if you liability is more than £100 then once again two payments on account are asked for - as this always puts you in a position where you have tax "on account" for the year end

So in answer to your question - not unless you have asked for payments on account to be reduced and have paid all that is deemed to be coming due by this year end (after 05/04/2017) will the second payment on account not be asked for

So for example

This year 2016 liability £2200 paid by 31/01/2017

Then Ist Payment on account asked for at 31st Jan 17 £1100

Second payment on account asked for £1100 for 31 July 2017

BUT my liability for year end 05/04/2017 will only be £1050 and I have asked for a reduction for payments on account in May 2017 - then as I have paid £1100 first payment on account at 31st Jan 2017 of £1100 and the total liability is £1050 - then I would not have to pay the second payment on account at 31st July as sufficient tax held by HMRC for the year

Let me know if you need any further clarification