Self Assessment tax payments and payments on account

You’ll need to make sure HMRC receive your payment before their deadline to avoid any interest. They will also apply a late payment penalty of 5% of the tax due if it remains unpaid by 2nd March.

Paying Self Assessment taxes to HMRC

There are different ways to pay HMRC and the time you need to allow for your payment to reach them depends on your payment method.

One of the quickest and safest ways to pay is by using online banking. All you’ll need is to know how much to pay and your individual UTR number. You can find this information in your Self Assessment Tax Return and SA302 tax calculation.

The SA302 is helpful when making payments as it shows the total due by the deadlines and your UTR number. When making a payment using online banking you’ll need give an 11 digit payment reference which is your UTR number followed by the letter ‘K’.

If we filed your return, you’ll find copies of your Self Assessment Tax Return and SA302 in your document store.

Payments on account

Payments on account are advance payments towards the tax bill you will owe for that tax year and are calculated using your previous year’s tax bill. If it was over £1,000 your payment is calculated and payable in two separate instalments.

The first payment is due on 31st January, the same day as your balancing payment which clears your tax bill for the previous year. The second is due on 31st July. This is designed to help you spread your payments into two more manageable lump sums.

Each instalment is normally 50% of your previous year’s tax bill. For example, if you paid £4,000 in tax for the 2022/23 tax year, you would need to make a Payment on account of £2,000 by 31st January 2024 and the second payment of £2,000 by 31st July 2024.

Unfortunately, this is not a voluntary payment. However, it can be reduced if you think your income will be lower in the current tax year. Please be aware, if you reduce your payment below the amount that actually becomes payable once your 2024 self-assessment return has been completed there will be interest, and potentially penalties, charged on the underpaid amount.

Once your Self Assessment Tax Return is submitted, if the actual amount of tax due is less than the payments on account made then the difference will be refunded by HMRC. If the payments on account are less than the total tax due, the balancing amount will be payable by 31st January.

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