31st July 2019 Payment on Account Confusion!

The HMRC system did not correctly process all the payments on account information for 2018/19. As a consequence,  some people may not receive the tax demands they expect by the end of July for their self assessment, even though a payment is due.

Under self assessment taxpayers are required to make payments on account of their tax liabilities. The payment on account installments consist of two payments of equal amounts:

  • the first on 31 January during the tax year and
  • the second on 31 July following the end of the tax year.

These are set by reference to the previous year’s income tax liability and Class 4 NIC if any.

A final payment (or repayment) is due on 31 January following the tax year. Payments are not due where the previous year’s liability is less than £1,000 or where 80% of the previous year’s bill was met by tax deductions at source.

Our clients should get in touch with us if you have not yet received a payslip for a payment on account due by 31 July 2019 but think you should have. We will have told you about any payments on account due this year when we prepared your 2017/18 Tax Returns last year.