The payments on account deadline is 31 July so it is important to ensure that payments are made on time or an alternative arrangement is negotiated with HMRC.
What are payments on account?
For those who are self-employed, payments on account are a requirement. This means you must make advance payments for your tax bill in two instalments during the year (this includes Class 4 National Insurance for the self-employed).
These payments are calculated from the bill of your previous tax year. The first payment was due on 31 January and is followed by the second self-assessment return – due by midnight on 31 July.
Ways to make your payment
• in your bank or building society – if you still receive paper statements from HMRC;
• bank transfer or direct debit – however, it is advised you plan this in advance to avoid any transfers being received after the deadline;
• online using a debit or corporate credit card; and
• with a cheque via the post.
Does this deadline apply to you?
The deadline applies to all those who are self-employed unless:
• you owe £1,000 or less as this can be made in a single payment on the first return; and
• more than 80% of your income is taxed at source.
How to reduce your payments on account
• speak to your accountant – they will likely have agent authority and be able to reduce your payment on account on your behalf;
• for those who do not have an accountant with agent authority in place, you can send your SA303 form by post to the tax office;
• you can also use the ‘reduce payments on account’ section online in your personal tax account.
Late payment interest rose to 7.5% this month, making it even more important for individuals to file their return on time.
If this deadline applies to you, two weeks is still plenty of time to arrange your second payment, and if you don’t think you can make this payment, make sure to get in touch with HMRC to try to set up a Time to Pay arrangement.
You must be logged in to post a comment.