We reported the issue of missing demands for 2018/19 payments on account in our newsletter on 17 January 2019, but the problem has not been resolved. In fact, it appears to be more widespread than a similar issue which arose for the 2017/18 payments on account.
The professional tax and accountancy bodies have complained, and HMRC has apologised. But it has made no attempt to tell to the affected taxpayers what to do. HMRC has also said it can’t fix the problem of missing PoA demands in time for the 31 July 2019 payment date.
If you did not see a request for 2018/19 PoA, you may have paid only the balancing payment due for 2017/18 by 31 January, and not the higher figure we will have advised. In this case the taxpayer will either have to pay all of their 2018/19 SA tax due by 31 January 2020, or voluntarily make PoA.
There is a risk that a voluntarily PoA will be automatically repaid by HMRC. So it may be easier to deposit all the tax due into a savings account and pay it all in January 2020. HMRC has confirmed that if the demands for PoA have been omitted from the taxpayer’s statement, that taxpayer will not be charged interest as long as full payment of all the tax due for 2018/19 is made by 31 January 2020.
If you did pay the correct amount of tax by 31 January 2019, including the PoA which we advised, but your statement did not show a demand for 2018/19 tax, this can be fixed. We can ask HMRC to added the payment made on account to the taxpayer’s record, which will ensure the tax is not repaid. This adjustment can’t be done if the taxpayer has not in fact made a payment on account.
Written by the Tax Advice Network