Top marks, GemDeveloper, and thanks! ( I'm looking forward to joining that few ).
Thank you kindly, Sir, he said...
One other thing that may be helpful for those who have a combination of a U.K. pension, on which you'll be taxed at source, and a foreign pension, which you will receive gross. Of course, you have to pay U.K. tax on (90% of), your foreign pension, but...
... your Tax Office may try to take that tax off you by adjusting your Tax Code so that the PAYE on your U.K. pension effectively mops up the tax on your foreign pension. You can agree to that if that makes your life easier, but you don't have to agree. You can opt to pay the additional tax in two instalments. These are due on 31 January of the Tax Year, and 31 July following the end of the Tax Year, concerned, although the first time that you do a Self Assessment, one only has to pay by 31 January following the end of the Tax Year. Once one has settled into a 'steady state' routine, and so one's incomes are fairly predictable, then estimating the amount is relatively easy, and the on-line self assessment will calculate an amount, based on your previous year's income and tax position, for a Payment on Account in January following the end of the tax year.
Paying as two instalments means that you keep the cash in your interest bearing account for as long as is reasonably possible. And... another tip... paying on-line using your debit card is very straight forward, and it has the advantage that you know that they've got the money... so, within reason, you can pay almost at the last minute. I have a colleague whose cheque to HMRC was stolen in the post, and thus never received by them. Fortunately, he noticed that it hadn’t been cashed, rang the Help Line, and they were very sympathetic, as his wasn’t the only one, of course, and they didn’t penalise him for a late payment.
If you end up owing a little more one year than the two Payments on Account have taken, perhaps 'cos of a pension increase (what?), then that's fine. But if you have a windfall in a particular year (so, for example, a Life Policy matures and you cash it in, thus generating a chargeable event), you will pay more tax in that year, and the system tends to assume that you will be getting the same income in the following year, and thus calculates your half yearly payments as being more that they will actually be when you do the Return. You can reduce the amount of a Payment on Account... but if you over-egg the reduction, then they charge you interest on the difference.
Hope that all helps.