How to pay, when to pay and how to find out what to pay….
31st July 2017 is the deadline (midnight) for the second self-assessment payment on account for tax year 2016/2017 (following the first payment made by 31st January).
What are “Payments on account”
‘Payments on account’ are advance payments towards your tax bill (including Class 4 National Insurance if you’re self-employed).
You have to make 2 payments on account every year unless:
- your last Self Assessment tax bill was less than £1,000
- you’ve already paid more than 80% of all the tax you owe, for example through your tax code or because your bank has already deducted interest on your savings
Each payment is half your previous year’s tax bill. Payments are due by midnight on 31 January and 31 July.
If you still have tax to pay after you’ve made your payments on account, you must make a ‘balancing payment’ by midnight on 31 January next year.
Your bill for the 2016 to 2017 tax year is £3,000. You made 2 payments on account last year of £900 each (£1,800 in total).
The total tax to pay by midnight on 31 January 2018 is £2,700. This includes:
- your ‘balancing payment’ of £1,200 for the 2016 to 2017 tax year (£3,000 minus £1,800)
- the first payment on account of £1,500 (half your 2016 to 2017 tax bill) towards your 2017 to 2018 tax bill
You have to pay your second payment on account of £1,500 by midnight on 31 July 2018.
If your tax bill for the 2017 to 2018 tax year is more than £3,000 (the total of your 2 payments on account), you’ll need to make a ‘balancing payment’ by 31 January 2019.
Check your payments on account
See your Self Assessment statement by logging in to your online account and clicking ‘View statements’. You’ll see:
- payments on account you’ve already made
- payments you need to make towards your next tax bill
Reduce your payments on account
If you know your tax bill is going to be lower than last year, you can ask HM Revenue and Customs (HMRC) to reduce your payments on account. Either:
- log in to your online account and click ‘Reduce payments on account’
- send form SA303 to your tax office
If you overpay or underpay
You might pay the wrong amount if your tax bill is higher or lower than you expected.
If you overpay, HMRC will send you a refund.
If you underpay, you’ll be charged interest.
How to pay
You can pay online.
There’s a fee if you pay by credit card. The fee isn’t refundable.
Use your 10-digit Unique Taxpayer Reference (UTR) followed by the letter ‘K’ as your payment reference. You’ll find it either:
- in your HMRC online account
- on your paying-in slip, if you get paper statements
HMRC will accept your payment on the date you make it, not the date it reaches their account – including on bank holidays and weekends.
The time you need to allow depends on how you pay.
Same or next day
- online or telephone banking (Faster Payments)
- by debit or credit card online
- at your bank or building society
- at the Post Office
You need a paying-in slip from HMRC to pay at a bank, building society or Post Office.
3 working days
5 working days
- Direct Debit (if you haven’t set one up with HMRC before)
- You can get help if you can’t pay your tax bill.
You’ll get a penalty if you miss the deadline for
- submitting it a tax return or
- paying your bill.
You’ll get a penalty of £100 if your payment is up to 3 months late and you’ll have to pay more if it’s even later. If this is the case then you can go online to the gov.uk web and go to www.gov.uk/estimate-self-assessment-penalties. You can appeal against a penalty if you have a reasonable excuse.