Payments on account are advance payments towards your tax bill. There are two payments due every year when paying your tax, one on the 31st of January and one on the 31st of July. Each of these payments are half of your previous years tax bill.
You are required to make two payments on account each year unless:
- Your previous self-assessment tax bill was lower than £1,000;
- If you have already paid more than 80% of all the tax you owe. This is most common when it has already been deducted through your tax code.
The payments must be made before midnight on the 31st of January and the 31st of July. If after making these two payments, you still have outstanding tax to pay then you are required to make a ‘balancing payment’ by midnight on the 31st of January the following year.
If your bill for 2017/18 tax year is £3,000 and you made two payments of £900 each that would be £1,800 in total which is £1,200 less than what you owe.
Therefore, in the following tax year your balancing payment would be £1,200 due on the 31st of January 2019.
If you need any further help with how to pay your tax bill, then feel free to contact us by phone or by email:
Phone: 0161 236 7677