UK Landlord Forum / Life

Just completed my tax return for 2013-14 and for the first time I expected to pay over £2000. The bill came in at the amount I expected but I was surprised to see an addition to the bill called first payment on account for 2014-15 which added another £1500  for payment by Jan 2015 and another £1500 to be paid separately in July 2015.
I rang the help line and I think that this is the answer. These payments are based on what  Hmrc think I will pay in the future so they will have them now thank you very much. If they are wrong they will give the money back at a later date.
This goes against everything I thought I knew about tax, ie they tax what you make the year before not what you might make next year with payments upfront.
Does anyone know if an accountant can sort this out so I only pay on my profits  from the previous year?

This is very typical. The double whammy is because its your first year.

So for this Tax year 2014/15 you should pay Tax Jan 15, July 15, and Jan 16.

This is to make it more like PAYE and you pay some tax during the year in which you are earning it.

HOWEVER, they can only penalize you if you miss the Jan 16 payment.

Personally I never pay the installments by clicking the box that says I predict it's all going to go wrong and I don't think I will pay tax next year.

Either pay some, none or all of what you think you will need to pay in Jan15 / July 15, but make sure you pay all of it by Jan 16. If you let them know what you are doing they won't bother you. This is a personal choice really, although HMRC wouldn't agree with that!

That's pretty much what the HMRC guy said. I think he called it the "elevated heartbeat payment". He was a nice guy and also backed up your warning about not clicking the reduced payments. He did offer to set up a monthly payment programme. I just paid  the Jan  payment in one go  and accepted the fact that when it comes to HMRC I have a lot to learn.
Thanks for your advice.

Might be worth getting an Accountant on board to prevent these types of things Mclovin