Payment on Account

Income Tax

Payment on Account (POA) notices are issued to individuals who had a tax liability during the previous year that was not settled by either ITIP or subcontractor's deductions. This could include income such as rental income, bank interest or dividends.

The POA is calculated by multiplying the previous year's liability (less tax deducted at source) by a fixed percentage, which is currently 105%.

If you receive a POA notice then it will ordinarily be due and payable on 6 January in the tax year to which it relates, or within 30 days if raised after this date.

If you receive a POA notice that you believe to be too high then you can apply to have an amount 'postponed.'  However, it is extremely important to note that if an amount is postponed and it is established that a greater amount should have been paid, then interest will be calculated on the POA balance due from the original due and payable date. You can apply for an amount to be postponed by completing the tear off slip on the POA notice and submitting it to the Division.

If the POA notice appears too low there is no obligation to pay more. The additional amount payable will ordinarily be due on 6 January following the year of assessment.

Class 4 National Insurance

Class 4 contributions are collected by the Income Tax Division, on behalf of the Department of Social Care.

On receipt of your completed income tax return, the Income Tax Division will establish any taxable profit. Should this profit exceed the lower profit limit, a Class 4 assessment will be raised. Payment is due at the same time and in the same way as your income tax, and you should therefore make provision for this.

A POA notice based on 100% of the previous year's liability will be issued which will again be ordinarily due and payable on 6 January in the tax year to which it relates, or within 30 days if raised after this date.

See National Insurance Contributions for further details