Important Deadline Reminder: Second ‘Payments on Account’ Due July 31st

With the second ‘payments on account’ deadline quickly approaching on July 31st, individuals who are self-employed are reminded to make their advance payments towards their tax bill. Stevie Heafford, Tax Partner at HW Fisher, emphasizes the importance of meeting this deadline to avoid costly mistakes.

The payments on account scheme allows individuals to split their tax bill into two payments, with the second payment due at the end of July. These payments are calculated based on the previous year’s tax bill and include Class 4 National Insurance for the self-employed.

If the payments on account do not cover the full tax liability, individuals will need to make a “balancing payment” by January 31st of the following year. Conversely, if the payments on account exceed the tax liability, a refund will be issued.

The deadline applies to all self-employed individuals unless they owe £1,000 or less, in which case a single payment can be made, or if they have already paid more than 80% of the tax owed.

To reduce payments on account, individuals can contact HMRC to adjust the amount they pay. This can be done through their accountant, by completing a SA303 form, or by accessing their online Personal Tax account.

Missing the deadline can result in late payment interest and penalties, so it is crucial to file on time. If payment cannot be made, individuals should contact HMRC to arrange a Time to Pay agreement.

As the deadline approaches, individuals are encouraged to take the necessary steps to ensure they meet their payments on account obligations and avoid any unnecessary penalties.