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Hello,
Based on the income tax liability pf £15600 for the tax year 2017/18, Sarah was liable to make 2 POA for the tax year 2018/19 of £7800 each.
In May 2019, Sarah made a claim to reduce her second POA to £6000. This reduced payment was made on 30 September 2019.
Sarah’s actual income tax liability for the tax year 2018/19 was £16000 and she paid the full balance outstanding on 31 January 2019.
How much interest is payable to HMRC in respect to her second POA for the tax year 2018/19?
1. The answer is £57.
2.In the revision kit, it says that £6,000 payment on 30 September 2019, which was 2 months later and final payment was made on time. Therefore £7800 was late for 2 months(31 July to 30 Sep 2019) and £1800(7800-6000) was late for 4 months(1 October 2019 to 31 Jan 2020).-Firstly, could you explain how £7800 was late for 2 months; £6000 is actually late for 2 months
-Secondly, £1800 runs from 1 Oct 19 to 31 Jan 2020. Could you explain how? As per the rule, interest is charged from the date the tax was due to be paid to the date of payment.
Therefore, £1800 was due on 31 July 2018.Please clarify these 2 points.
Regards,
AdarshThe POA that SHOULD have been paid at 31 July 2019 was 7,800 as actual liability was £16,000 – so that the full 7,800 was outstanding for 2 months until the 6,000 was actually paid, leaving 1,800 of the POA still unpaid for a further 4 months until 31 January 2020
This is what the answer correctly tells you
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