Taxpayers who owe more than £1,000 in tax during the 2012-13 tax year will be required to make their second payment on account (POA) towards the current year’s tax by July 31 2013.
If more than 80 per cent of the tax owed in the previous tax year was collected at source, payments on account were not required.
However, those required to use POA are due to pay their second and final payment on or before July 31 2013. Each payment is half of the tax due for the previous year.
Taxpayers should have paid their first POA instalment for the tax year 2012-13 on January 31 2013, with the second payment due at the end of this month.
For those who know that their income for the current year will be lower than last year’s figure, it is possible to ask to reduce POA. However, do be aware:
If you pay less than you need to, HMRC will charge you interest
HMRC may ask you to pay a penalty too if they think you haven’t taken reasonable care
It is possible to reduce payments on account in any of the following ways:
Make a claim on the calculation pages of your tax return
Sign on to HMRC Online Services and make a claim online
Download, complete and send form SA303
For taxpayers who realise that they’ve reduced payments by too much – often due to income turning out to be higher than previously thought – it is essential to notify HMRC as soon as possible.
HMRC can be notified online – download form SA303 – or by calling the phone number on the Self Assessment Statement. Any delays in notifying the authorities could result in paying interest and a further penalty.