Self Assessment - Large reduction in payment on account

[mike]

Hi

I shall be filling in my SA form for 2015-16 shortly, and have never had to request a reduction in payment on account before.

My tax due for the 2016-17 will be under 20% of that I paid for the 2015-16 tax year, and HMRC by default assume the same amount for the following year.

Has anyone any experience of requesting such a large reduction and how HMRC respond ?

Thanks for any info
Mike

[PinkDalek]

Hi

I shall be filling in my SA form for 2015-16 shortly, and have never had to request a reduction in payment on account before.

My tax due for the 2016-17 will be under 20% of that I paid for the 2015-16 tax year, and HMRC by default assume the same amount for the following year.

Has anyone any experience of requesting such a large reduction and how HMRC respond ?

Thanks for any info
Mike

I've only ever used paper forms over the last 40 years or so (See https://public-online.hmrc.gov.uk/lc/co ... =SA303.xdp) and have never had a claim to reduce a payment on account refused. However, I have had to chase up such claims on occasion but, if you are registered online, use the first link here https://www.gov.uk/government/publicati ... ount-sa303. I haven't checked my paperwork but think one of those reductions was processed via phone as they'd lost the paper version.


I'm sure you know if you reduce too far you'll end up paying interest to HMRC.

[dickscovered]

I did it for my sister-in-law, for whom I have tax agent filing status.

Like you, I was intrigued by how it would work. Her income was mainly in South African rand which had taken a hammering, and if HMRC had looked, they would have been able to see that from previous returns and that was the reason given by us for the reduction. Whether they look at all or rely on the penalties to make sure that people don't take the mickey, I couldn't say. Assuming that your calculations are correct, I think you have nothing to fear in any case. You will have all the information to hand if they feel the need to query.

[mike]

Thanks PD, I'll have a look at that form as I fill in my SA.

I'm sure you know if you reduce too far you'll end up paying interest to HMRC.

Yes, I'm going to over-estimate, what with the £1,000 savings allowance and £5,000 Dividend allowance all new from April 2016, and being slightly unsure how they are all going to work together. I'll then fill in my self-assessment for 2016-17 as soon as I can, and in any case well before 31 July so the 2nd payment on account will be correct.

Thanks
Mike

[PinkDalek]

Thanks PD, I'll have a look at that form as I fill in my SA.

I happened upon this https://ion.icaew.com/taxfaculty/f/tax- ... y-problems and thought of this Topic.

It includes:

"Are any other members experiencing difficulties with the HMRC on line service to reduce self assessment payments on account for 2016/17?"

I'm unsure if your claim to reduce was to be done online or by paper but it would be interesting to learn how it went.

[mike]

Thanks for the link PD. Reading through they are all agents whose claims were not processed, rather than rejected.

I submitted my SA form online on Sunday, and used the integral note in that form to claim reduction, rather than the separate form you pointed me to earlier. Bit of a faff as you can only use 240 characters to explain why (but I suppose if Trump can use 140 characters on Twitter to warn car makers against building factories in Mexico, 240 should be enough for me !)

The system acknowledged receipt but said records would not be updated for 72 hours, so I'll check back Wednesday evening.

I'll let you know how I get on, although again from your link, it seems only a phone call is needed if they do not process my claim. If they reject it, I'll work out how to cross that bridge then.

Cheers
Mike

[PinkDalek]

... I submitted my SA form online on Sunday, and used the integral note in that form to claim reduction, rather than the separate form you pointed me to earlier. Bit of a faff as you can only use 240 characters to explain why ...

Thanks for your reply. You are way ahead of me in that I've yet to submit personal tax returns online, so wasn't aware of that facility. Trust it all goes well and your promised update will be of interest.

[mike]

Well, HMRC are on the ball.

My request for a very large reduction in my 2016-17 tax on account, down to just under 15% of 2015-16, has been accepted without any question. Whether it was my carefully multi-edited-down-to-240-characters-spiel I doubt; indeed, I doubt anyone has even read it .... yet!

But I shall be getting my 16-17 return in as soon as I have all the figures. This should hopefully forestall any head scratching at HMRC when someone does get round to looking at it.

And more joy - I've even got a £200+ rebate to put towards the first payment !

Mike (and a big smile of relief!)