26th July 2022The second ‘payments on account’ deadline is this week – What self-employed taxpayers need to know

The second ‘payments on account’ deadline is this week – What self-employed taxpayers need to know

London, 26th July 2022 – The second ‘payments on account’ deadline is on July 31st. With only a week to go, Trusha Shah, Tax Manager at accountancy firm HW Fisher outlines what ‘payments on account’ are and who needs to complete this tax return.

What are ‘payments on account’?

Shah says: “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 installments 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 January 31st and is to be followed by the second self-assessment return – due by midnight on July 31st.”

How 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
  • 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
  • You have already paid more than 80% of the tax you owe

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

 

Shah adds: ‘If this deadline applies to you, one week is still plenty of time to make your second payment. And if you don’t think you can make this payment, make sure to get in touch with HMRC to try and set up a Time to Pay arrangement.’

 

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Jamie Morrison HW Fisher

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