You may recall that we explored the ins and outs of the world of Payment on Account in one of our recent blogs.
For those of you who may not have had chance to read it, click here.
For those of you who did see it, then you’ll most probably remember that we mentioned the fact that Payment on Account is made in two instalments.
Broadly speaking, Payment on Account is the payments individuals make towards their following year’s income tax and Class 4 National Insurance Contributions.
You may wonder why we’re writing another blog about these payments. Well, it’s to remind individuals that their second payment is due very soon – by midnight on July 31 to be precise.
Each of the payments equate to half of the amount due for the previous year. However, there are instances when it’s possible to reduce both of your payments, such as if you:
- Think your tax bill is less for 2017/18 than 2016/17 because you had less self-employed income or;
- Know you owe less this year than last year, having already done your tax return for the previous year
You’ll need a reasonable estimate of the amount you owe in order to bring your payments down. However, it’s important you take considerable care when carrying out these calculations, as individuals who reduce their payments too much often have to pay interest charges and a potential penalty if HMRC believe that their claim is fraudulent or negligent.
Word of warning – you must notify HMRC if you intend to reduce your payments. If you pay a lower amount without telling them first, you’ll show up on their systems as not paying enough. If this happens, then they’re more likely to contact you and you could be fined.
If you’re uncertain of what your payment should be for the forthcoming July 31 deadline, want to be certain that your figures are 100% correct or want to make sure that you meet the deadline, then it’s always best to seek expert advice.
We have 15 expert partners on hand, who can provide you with industry-leading advice on all financial matters, including your Payment on Account affairs. Contact them today on 01905 777600 or email@example.com.