If you think you will have difficulties paying your bill, contact HMRC as soon as you can
Individuals who fill in a self-assessment tax return -and owe tax over £1,000 which has not been collected in other ways (eg by adjustment to a tax code) - need to pay their second payment on account by 31 July 2022.
Payments on account are tax payments made twice a year by taxpayers to help them stay on top of their payments and spread the cost of the upcoming year’s tax. Generally this would apply to people who are self-employed or have other income from property – for most people who are employed, their tax is managed under PAYE.
Payment is spread over two instalments during the year and is calculated based on the previous year's tax bill. Each payment is typically 50% of your last bill. A final payment is made after the actual tax return is submitted.
Kevin Sefton, CEO, untied, commented: “The payment on account deadlines are 31 January and 31 July which means the second cut-off date is fast approaching. In theory tax payment on account helps the self-employed spread out their bill. However, it can lead to more financial hardship for those who have been hit by the cost of living crisis and haven’t put the money way already.
“We always advise individuals who have to pay these two sums every year to set money aside regularly in order to pay their liabilities at the beginning and midpoint of every calendar year. If you are having difficulties paying your tax bill, don’t ignore it - contact HMRC as soon as you can, to see if they can set up a payment plan for you. It also makes sense to submit tax return information early, as this provides time for planning and identifying potential tax savings.”
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