What are Payments on Account?
Date posted: 2024-01-26
‘Payments on Account’ are advanced payments you make toward your annual tax bill.
There are two significant payment dates during the year – the first payment is due by 31st January and the second is due by 31st July.
These payments have to be paid unless the following applies –
- Your self-assessment tax liability is under £1000
- Over 80% of your income is taxed at source (PAYE)
The way HMRC calculate how much annual tax you owe is based on your previous years tax bill.
If you know your annual tax bill is going to be lower than last year, you can ask HM Revenue and Customs (HMRC) to reduce your payments on account. Failure to pay the payments would result in added interest on top of your tax bill.
We not only ensure our clients owe the right amount of of tax but that our client settle their liabilities, including payments on account, before the relevant deadlines.
If you have any questions about your own self-assessment tax liability please contact My Management Accountant here.