Increase in payment on account threshold for income tax self-assessment
Posted by Administrator (admin) on Apr 07 2009 at 11:28 AM
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From 6 April 2009, for tax years starting on or after this date, the
threshold below which taxpayers do not need to make in-year payments
on account (POA) of their annual income tax liability under the
income tax self-assessment (ITSA) system will double from £500 to
£1,000.

In-year POA are the two equal payments made by taxpayers in January
and July on account of their annual income tax liability for the
previous tax year.

The new threshold will apply to income tax due from ITSA taxpayers
for tax years 2009-10 and beyond.

This will mean that those taxpayers with liabilities under £1,000 in
2008-09 will not have to make instalment payments on 31 January and 31
July 2010 towards that 2009-10 liability, but will instead make a
single payment on 31 January 2011.

However, if your tax liability for 2007-08 as shown on the tax return
you filed by 31 January 2009 is above £500, payments on account will
still be due in January and July 2009. This is because these payments
are on account for 2008-09 for which the £500 threshold still
applies.