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TonyTax
TonyTax, Tax Consultant
Category: Tax
Satisfied Customers: 15980
Experience:  Inc Tax, CGT, Corp Tax, IHT, VAT.
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Dear tax advisor. I have just completed a self assessment

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Dear tax advisor. I have just completed a self assessment for 2016/17 and HMRC are asking I pay an advance balance for 2017/18. This is the first time I have been asked to pay in advance. Firstly can I only pay tax due for 2016/17 and not the advance balance and if I do am I liable for a fine or procescution?
Kind regards
Marcos Vicinanza

Hi. My name is*****'m looking at your question now and will post my answer or ask for more information here in a short while.

Read about payments on account here.

You can reduce your payments on account if you consider that your income for 2017/18 will be less than that for 2016/17 on which the payments on account for 2017/18 are based. You can put a revised payment on account in your tax return or call the tax office to reduce them if you have already submitted your tax return earlier and your situation has changed. You can also reduce them via your online tax account. If you over-reduce your payments on account, you are charged interest at 3% per annum until you pay the tax that should have been paid on its original due date.

I hope this helps but let me know if you have any further questions.

Customer: replied 4 months ago.
Hi Tony I suppose I really just wanted to know if I can get away with only paid tax due for 2016/17 and not the advance balance for 2017/18. Will HMRC demand I pay the 2017/18 advance balance? I am paying tax due for 2016/17. Thanks Marcos

HMRC won't query it if you reduce your payments on account to £0 but you need to put the figure in or you will be asked to pay. HMRC can impose penalties if you reduce your payments on account to £0 knowing that you will have a liability for the next year but I've never seen them do it.

Customer: replied 4 months ago.
Thank you Tony

Thanks.

Would you mind rating my answer before you leave the site please.

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