SA Immediate Payment Demand

[ladymuck]

I had this a couple of years ago. I set my POA to zero (on the advice of my then accountant) every year. Then, all of a sudden, I discovered the balance was immediately due and interest was being charged.

I have since learned to not change the POA unless you are 100% certain you will not have any tax to pay in the next tax year.

[northernladyuk]

He wouldn't be asking the OPs accountant.

[Maslins]

Thanks - yes this was a recent submission. I guess my question is should there have been a minimum POA made as opposed to no POA which may have covered the amount owed more ?

Well, if you reduce your PoA, it should be to a figure that you anticipate will nicely match your liability. Of course there'll always be an element of estimation in there, as when you pay the 31 Jan 17 one you likely won't know precisely what your income to 5 Apr 17 will be yet. If you're a bit under/over, then inevitably there will be an under/overpayment.

If your income in 2016-17 was only a bit down on 2015-16 (also factoring in changes in tax rates/thresholds/whatever), then you should only reduce your PoA a bit, not to £nil.

[kaiser78]

It was a serious response! The first thing I would do is ask my accountant.

It does seem to me entirely unreasonable what HMRC did. Something I am going to watch out for as I will soon be in a similar position.

2015-2016 large dividends paid. 2016-2017 was a quarter of previous year(I told them how much). 2017-2018 hard to tell - might be double or treble previous year.

I intend to discuss it with my accountant (QDOS) and take appropriate action.

Okay (bit of a shotgun response by you BP), yes the first thing I did do was ask my accountant (as per my post) !

So I am questioning whether my accountant had taken the right course of actios, which Maslins have clarified in their response (thanks).

[kaiser78]

Presumably this is following the fairly recent submission of your 2016-17 SA return? If so, and there is a liability, then this all makes sense.

You reduced your PoA, so either paid too low/none at all. HMRC don't know this until the 2016-17 return is submitted, which presumably showed an income, and hence liability, high enough that you should have made some PoA (higher than you did).

Those amounts were due 31 Jan 2017 and 31 Jul 2017, hence being chased now.

Shouldn't be anything too penal...just sounds like you reduced the PoA too much, and HMRC now want what you should have paid, with a small amount of interest. Ie if you'd just paid the PoA as they originally would have been based on 2015-16 return without any manual adjustment, you'd be no better/worse off aside from the little bit of interest.

Thanks - yes this was a recent submission. I guess my question is should there have been a minimum POA made as opposed to no POA which may have covered the amount owed more ?

[BrilloPad]

Serious question in a serious thread, please.

It was a serious response! The first thing I would do is ask my accountant.

It does seem to me entirely unreasonable what HMRC did. Something I am going to watch out for as I will soon be in a similar position.

2015-2016 large dividends paid. 2016-2017 was a quarter of previous year(I told them how much). 2017-2018 hard to tell - might be double or treble previous year.

I intend to discuss it with my accountant (QDOS) and take appropriate action.

[kaiser78]

What would NLUK do?

Serious question in a serious thread, please.

[Maslins]

Presumably this is following the fairly recent submission of your 2016-17 SA return? If so, and there is a liability, then this all makes sense.

You reduced your PoA, so either paid too low/none at all. HMRC don't know this until the 2016-17 return is submitted, which presumably showed an income, and hence liability, high enough that you should have made some PoA (higher than you did).

Those amounts were due 31 Jan 2017 and 31 Jul 2017, hence being chased now.

Shouldn't be anything too penal...just sounds like you reduced the PoA too much, and HMRC now want what you should have paid, with a small amount of interest. Ie if you'd just paid the PoA as they originally would have been based on 2015-16 return without any manual adjustment, you'd be no better/worse off aside from the little bit of interest.

[NCOTBAC]

What would NLUK do?

He wouldn't be asking the OPs accountant.

[BrilloPad]

What would NLUK do?

[kaiser78]

My position is that I have this week received a notification from HMRC for immediate payment of my self assessment return for FY2016/17. Oh and interest is also already being charged.

I have questioned this with my accountant who has advised that the POAs due to be paid at end of Jan and July were removed deliberately for this FY, as I had taken a higher than normal dividend during the previous year (15/16) and the amount would not be known for 16/17.

So HMRC are now suddenly demanding immediate settlement. I do wonder if this is part oversight of my accountant, who should have advised at least a minimum POA payment to be made, or is this a standard approach ?

I was not aware of this until the letter came through and so not sure how to play this. Any advice welcome.