Payments on account are advance payments towards your next Self Assessment bill. You will need to make payments on account if you complete a tax return and your last tax bill under Self Assessment (ignoring any Class 2 National Insurance that you paid) was £1,000 or more, unless at least 80% of the tax that you owe is collected at source, for example, under PAYE.
Each payment on account is 50% of the previous year’s tax and Class 4 National Insurance liability. You must make the first payment on account by 31 January in the tax year (together with any balancing payment for the previous tax year). The second payment on account is due by 31 July after the end of the tax year. If you have payments on account to make for 2022/23, you must make your second payment by 31 July 2023.
It may be that you now know that your payments on account are too high because your income in 2022/23 is less than it was in 2021/22. If this is the case, you can reduce your payments on account to the correct level. This can be done online via your personal tax account or by post on form SA303.
It is important not to underpay or to pay late as interest is charged on payments which are not made in full and on time.
We can check whether your payments on account are at the correct level. Contact us for more information on this and any other self-assessment and tax-related queries. We’re here to help!
