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Original poster

Most boring thing ever sorry but wow they want us to pay tax for this covid year?!

27 replies

Newgirls · 30/11/2020 15:22

Ok tried to make that as grabby as pos.

I did my self assessment and it includes a payment for the next tax year. But due to covid my earnings are WAY down from last year.

Surely this will be case for millions?

Yet they say I have to pay it and then claim it back? I’ve tried to get through to discuss but of course it’s busy.

I do have until end of next year to pay so that’s something but clearly it will be the wrong amount so a total farse.

Anyone have any tips on this pls?!

OP posts:
TeenPlusTwenties · 30/11/2020 15:24

So you need to do a payment on account?

My suggestion would be to write/email them and show how your income this tax year is going to be way lower so payment on account won't be needed. No idea if they will accept that though.

satnighttakeaway · 30/11/2020 15:25

I thought you filled in the bit about your earnings being lower in the next year and asked for a reduced payment, I'm sure I've seen it when I've done a tax return

Original poster
Newgirls · 30/11/2020 15:26

Thanks for replying! Yes a payment on act.

I could tot up my earnings for the year so far as evidence and email them with that?

OP posts:

Interested in this thread?

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General money
TeenPlusTwenties · 30/11/2020 15:26

Just did a google. The first thing that came up was:

f you think that your income for the next tax year will be lower than in the previous tax year, you can apply to have your payment on account reduced. You can reduce payment on account by logging in to your online HMRC account and clicking 'Reduce payments on account'. Or, you can send form SA303 to your tax office.

www.simplybusiness.co.uk/knowledge/articles/2019/06/payment-on-account-what-it-is-and-how-to-pay/

(That is for self employed)

Original poster
Newgirls · 30/11/2020 15:27

Amazing thank you! I failed to find that on the tax site 🙄

OP posts:
Original poster
Newgirls · 30/11/2020 15:29

Sat night - I put something in that and tried to add a note but it still came up with a sum which I think will be too high. I might have missed something to be fair

OP posts:
satnighttakeaway · 30/11/2020 15:30

@Newgirls

Amazing thank you! I failed to find that on the tax site 🙄
Did it not come up automatically as a question at the end of your return, I'm trying to remember back to last year, I have some income I had to put in a tax return and I'm sure I remember that being there.
LarsErickssong · 30/11/2020 15:35

[quote CuriousaboutSamphire]You can defer it

www.gov.uk/guidance/defer-your-self-assessment-payment-on-account-due-to-coronavirus-covid-19[/quote]
That's the second 2019/20 payment on account, OP is on about paying her 2020/21 payments on account. Also even if you deferred your second 2019/20 payment on account it's due for payment 31st Jan 2021.

Original poster
Newgirls · 30/11/2020 15:35

Thank you all. I knew I could defer paying it til end Jan 21 but I know already my earnings are far lower so I want to address it earlier.

I’m going to email them as per the link and hope that helps.

Thank you all xxxx

OP posts:
Original poster
Newgirls · 30/11/2020 15:36

Lars is right / I’ve paid all last years.

It’s next years that’s bugging me

OP posts:
Bells3032 · 30/11/2020 15:42

You get a question at the end about how much you want to put on to account for the following year. just put it to 0% and you don't have to pay anything

WeeFinbar · 30/11/2020 15:46

Don’t undercook your assumptions too much. Be realistic. You will get charged interest on the difference between what your actual return will be and what you suggest the payment in account is.

satnighttakeaway · 30/11/2020 15:49

@Bells3032

You get a question at the end about how much you want to put on to account for the following year. just put it to 0% and you don't have to pay anything
I think that's what I'm remembering, can you really put 0 in?
Bells3032 · 30/11/2020 15:59

@satnighttakeaway I did but it was for a secondary income (from my flat i rented out for a bit) so not 100% sure but assume it would be the same

CuriousaboutSamphire · 30/11/2020 16:03

20/21 at the end of that page I linked to! When you call you can discuss deferring or reducing... whichever works best for you!

Your Payments on Account are based on your previous year’s tax bill. If your financial situation has been impacted by coronavirus, you may have a reduced tax liability arising for the 2020 to 2021 tax year. You may want to apply to HMRC to reduce your 2020 to 2021 payments on account.

TigerDrawers · 30/11/2020 16:03

As a PP has mentioned you can apply to reduce your payments on account online here - www.gov.uk/government/publications/self-assessment-claim-to-reduce-payments-on-account-sa303.

It comes with the caveat that you shouldn't reduce it too low deliberately as they can come after you for penalties and/or interest if you do. But, the system is there to allow you to reduce you POAs if you genuinely have a reduction in income compared to last year.

However, please beware - the SEISS payments you may have received are also taxable, so they will need to be included in your 2020/21 income.

LarsErickssong · 30/11/2020 16:05

@satnighttakeaway yes you can reduce to 0 if you are certain you won't have tax to pay next year, however as @WeeFinbar said you should be cautious with how low you go as you will owe interest on any difference.

Original poster
Newgirls · 30/11/2020 16:49

You pay tax on the SEISS? I guess that was inevitable...

Interesting that it’s best not to put 0 as they can charge interest on being under. I guess to discourage everyone doing that?

OP posts:
TigerDrawers · 01/12/2020 08:45

@Newgirls

You pay tax on the SEISS? I guess that was inevitable...

Interesting that it’s best not to put 0 as they can charge interest on being under. I guess to discourage everyone doing that?

Yes, I'm afraid so. It's a replacement of taxable income, so is only fair that it's also taxable. It hasn't been particularly well advertised as such unfortunately so it's news that will come as a surprise to many.
Original poster
Newgirls · 01/12/2020 08:46

Thanks Tiger - I certainly don’t remember it being mentioned. Though my payments were quite small so that’s something!

OP posts:
CuriousaboutSamphire · 01/12/2020 14:16

@Newgirls

Thanks Tiger - I certainly don’t remember it being mentioned. Though my payments were quite small so that’s something!
There has been a note about it on all SEISS application pages. Before during and after you sign up for them!

t hasn't been particularly well advertised as such unfortunately so it's news that will come as a surprise to many. It really shouldn't. Or only if people sign up for, apply for SEISS, without reading the not so small print! It has ben there, on all pages involved in the explanations and applications, from the start!

And if you use an accounting App it explains it all again, in notices - repeated for each SEISS payment, and on the automatic labelling of the payment etc.

Discussed here, on many facebook pages, Martin Lewis, podium talks, newspapers etc etc.

It REALLY wasn't glossed over or hidden!

Original poster
Newgirls · 01/12/2020 16:18

I’m sure it isn’t ‘hidden’ but I didn’t see it on any of the many emails I got about it or the pages I filled in to get it.

OP posts:
CuriousaboutSamphire · 02/12/2020 08:45

Sorry to labour it Newgirls it might be useful for others...

www.gov.uk/guidance/claim-a-grant-through-the-coronavirus-covid-19-self-employment-income-support-scheme

Every version of this has the same paragraph

The current one The grant does not need to be repaid if you’re eligible, but will be subject to Income Tax and self-employed National Insurance and must be reported on your 2020 to 2021 Self Assessment tax return.

Early November The grants are taxable income and also subject to National Insurance contributions.

Updated March one has that first paragraph and the sentence The third taxable grant is worth 80% of your average monthly trading profits, my bold

There are also pages that explain what kind of evidence they require - including bank statements, accounts and reduction of clients/jobs etc. But still many people claiming SEISS don't seem to know this. It frustrates me that so many fellow self employed people don't take active steps to reach the readily available information. One woman even told me she couldn't access the pages... but had accessed the claim site. She was incredibly angry when I told her they were on the same bloody site!