Tax: payment on account and SMP

[June2009]

Hi there,

Due in June I will be claiming SMP from around May.
Does this mean I should be able to reduce my payment on account that I am supposed to pay by the end of this week?

you can reduce your poa
if the reduced payments (Jan & Jul) are less than your liability for that year then HMRC will charge you interest on the underpayment
you need to reduce them on your tax return or by writing to them, otherwise they will chase the payment.

If I remember correctly, you can reduce your payment on account, I'm sure I did it in the same circumstances. I was careful not to pay them less than I thought I would need to - I can't remember now if there was a penalty or I just didn't want to be caught out.

You can reduce your payments on account for January and July 2009 if your income for 2008/9 is lower than your income for 2007/8. If your income is not going to fall until May that will be in the 2009/10 tax year.