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To produce a form SA303 claim to reduce payments on account, details are entered here. There are a number of reasons why a claim may be required these include:
Client has ceased trading (either retired or switched to PAYE)
Client has died.
One off lump sum was received in the year (Capital gains are automatically excluded from payments on-account)
Income from dividends may vary and cannot be assumed to be as high in the following year.
The SA method for calculating payments on account simply looks at the amount of tax due in the current year. It does not analyse the sources of income which make up the total. Therefore, in the cases described above or in any other instance where a reduction is required, a claim to reduce payments should be made.
Entries made here will be shown on the tax calculation summary. The amount shown in 'Your first payment on account' box 10 (2007 : 18.7) will be reduced and a tick placed in box 9 (2007 : 18.6). If the payments are reduced to Nil, box 9 (18.7 : 2007) will show 0 and box 10 (2007 : 18.7) will be ticked. Box 15 (2007 : 18.8) is reserved for cases where no payments are due based on the standard SA tests. The reason for the claim will be printed in the additional information box on the Tax Calculation Summary.
If the claim to reduce turns out to be incorrect - reduced too much, interest will be charged on the difference between the amount paid and the whole amount that is actually due.
