Second payment on account - will it reduce?

[smarSarah]

I’ve just submitted my 24/25 tax form. I’m still yet to pay my second payment on account due 31st July. Will this payment on account update and change because my self assessment has been completed (I believe it should reduce slightly)

thanks

No. Payments on account are based on your previously submitted return.

You can make your own adjustment online, giving a reason for the reduction

It should update automatically as HMRC now have your “correct” tax figure for the year. It is fine to pay the lower amount.

This is not quite correct. The payments on account are initially based on your previous year’s tax, but will adjust downwards if your actual tax for the current year is less (only once you have submitted your return).

Mine did - I submitted in May and the July payment on account disappeared entirely when I checked about 2 weeks later.

Yes the second payment on account will reduce if your tax due for 2024/25 is lower than the payments on account you were due to pay. You can check your online account.

Can I ask a daft question? How do you actually pay the second payment? I’ve had no reminders or instructions and on the HMRC app it says I have no payments outstanding? First time doing this!

Are you sure you have to make a POA then?

Mine is showing on my HMRC account as due by 30 July, and number of days until payment.

Did you submit a return for 2023/24? Payments on account are only due if your tax to be paid was over £1k in the previous tax year.

I don't think they necessarily tell you. I might have got some generic email, not sure. I don't have the app, but when I log in to the system I can see how much I have to pay by end July and I paid it off.

Yes as you have filed before the second payment on account date.

In a day or so the actual figures should be captured and find their way through to your account.

Any reductions take affect now and you can pay less on 31st July. Any higher amounts you cam pay the payment on account due 31st July and the extra balance by 31st January 2026.

I got a letter from HMRC last week detailing outstanding amount. The first installment of the "on account" payment was made in Jan.

I had to pay it last year so knew it would be due

My accountant also sends me a reminder.

Have paid it though as I am too disorganised to file return early.

Yes, I’m pretty sure my 2nd payment amount automatically went down when I submitted my actual figures as they had obviously based their calculation on estimated figures. It’s the main reason I submitted it before the second payment was due, as I knew it would be less.

It's does automatically adjust although, given I used to file about 300 a year, I have experienced times when the return had a hiccup in the system and so the change wasn't made.

The most common reason was when the marriage transfer allowance was being given to the spouse. On many occasions (although not all) the return fell into some.sort of internal,.back office, process which was incredibly slow and so the estimates didn't update.

That's why I say to watch out. There's an excellent chance it will, but it might not and then a call to HMRC will be on the cards to find out wazzzz up.

Luckily I'm out of that rat race now. It was such a drag calking and waiting for hours, sorting these run of the mill, HMRC techy issues.

Interesting. Mine says no tax due on the account, but I have some money owed due to overpayment that I have requested back… perhaps due to that? Accountant has said I need to make the payment anyway, as per the usual rules of self assessment so I’ve done it anyway 🤦‍♀️

This is me too. My second payment amount had been revised down with no explanation. But I was waiting for an overpayment too so maybe it's that? I wish they'd say, there was no correspondence from them. I've written to them about the overpayment so many times, and every time I call them they say they've escalated it but they never told me if it was actioned.

So I made the second payment that I thought was due and it’s just been added to the amount of credit I have on my account… so confused!
They are taking their sweet time paying me back the initial amount that they owe me anyway…