What to do if you’ve lost your UTR number
Whether you're someone who likes to file your annual self-as...
By Lynne Gowers on 6th July 2018
It is the time of year again when HMRC are sending out Self-Assessment Statements. These show all personal tax transactions you have made since the last statement along with details of the second payment on account for the year 2017-18, due by 31st July.
So here’s all you need to know about Payments on Account for self-assessment tax.
Payments on Account are advance payments towards future tax made by those completing a self-assessment.
HMRC calculate this by looking at your previous year’s tax bill and it is paid in 2 instalments, enabling the cost to be spread over the year.
The first instalment is due on 31st January (the same day as your balancing payment for the previous tax year) and the second is due on 31st July.
The intention is to enable you to spread your personal tax bill over the year, and avoid large lump sum payments each January.
Each of the annual instalments will normally be 50% of your previous year’s self-assessment tax bill. So, if you paid £5,000 for the previous tax year, you will make the first payment on account of £2,500 on 31st January and a further £2,500 on 31st July.
If, when you file your self-assessment, your payments on account are less than your final bill, you will have to pay the balance. Equally if you have paid too much, you will be entitled to a tax refund.
You do not have to make payments on account if your personal tax bill for the previous year was less than £1,000 after PAYE.
Likewise payments on account will not be due if 80% or more of your income in the previous tax year was taxed at source.
If your tax circumstances are due to change from one year to the next, for example if you are entering full time work and will be taxed under PAYE, you should contact HMRC (or Boox, if we prepare your tax return) and they may reduce your payments on account.
However if they do this and you end up underpaying tax as a result, you may be charged interest and penalties on the amount involved.
There are several ways to make a payment on account, and handily HMRC lists these on the back of the self-assessment statement.
You can also explore the payment options in our blog: How to pay HMRC
Here at Boox we offer an early bird discount rate for our self-assessment service, starting from £110 + VAT (dependent on your circumstances) until 31st August 2018. If you would like to beat the rush and higher fees, download a questionnaire or get in touch with our tax team.
Take a look at our recent blogs below.
If you have made the decision to set up and run a limited company, one of your priorities should be ...
Published: 11th December 2018
Over the holiday period, we are closed on the Bank Holidays and the office will close slightly early...
Published: 10th December 2018
We want to warn all of our clients and readers about a sharp rise in the number of phone scammers pr...
Published: 6th December 2018
HMRC are dogged in their efforts to recoup unpaid tax through schemes that they view as tax avoidanc...
Published: 8th November 2018
Operating as a sole trader does exactly what it says on the tin – you are running your busines...
Published: 1st November 2018
Yesterday, Chancellor Philip Hammond delivered his Budget to the House of Commons, promising an end ...
Published: 30th October 2018
The director of an engineering company based in Aberdeenshire has been banned for seven years from r...
Published: 26th October 2018
Making Tax Digital, aka MTD, is HMRC’s project to modernise and digitise the tax system by 202...
Published: 22nd October 2018
October’s here and the Summer’s heatwave is fast becoming a distant memory. As well as a distinc...
Published: 4th October 2018
Registering for VAT (value added tax) allows your business to claim the VAT back on VAT rated busine...
Published: 28th September 2018
50,000 people, including nurses and teachers, are facing life-changing tax bills going back over 20 ...
Published: 21st September 2018
If you need a little help to find the right accountancy service, don’t worry.
Thousands of contractors, freelancers and locums turn to Boox for help and advice with their limited company accounting. They love our personal service and app.
Specialist accounting for sole traders and the self employed, Boox combines easy online tools with expert support to take away the stress of handling your accounts.
Our combination of market-leading accounting software and expert personal advice gives you greater financial control and more time to grow your business.