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The answer to this is – it depends!

If you have already prepared and filed your 2021/22 self-assessment tax return and your first payment on account that you made in January 2021 covers your tax liability for the year, then no you don’t have to make the second payment on account. Once HMRC have processed the tax return your account will be updated accordingly.

If you have not filed your 2021/22 self-assessment tax return and believe your profits and therefore tax are in line with last year, then yes you do still have to make the second payment on account by the due date.

If you believe your income has dropped from last year and your second payment on account is too high, you can ask HMRC to reduce your payments on account either online or by post. Caution should be taken in reducing payments on account as if it turns out they were due, interest will arise from the date the payment should have been made.

If you would like to discuss your tax affairs further please contact us on 0800 0523 555 or use our simple online contact form to arrange a free initial consultation.

Date published 21 Jul 2021 | Last updated 10 Jun 2022

This article is intended to inform rather than advise and is based on legislation and practice at the time. Taxpayer’s circumstances do vary and if you feel that the information provided is beneficial it is important that you contact us before implementation. If you take, or do not take action as a result of reading this article, before receiving our written endorsement, we will accept no responsibility for any financial loss incurred.

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