Taxpayers across the country must settle bills with HMRC by midnight tonight, or face a fine.
31 July marks the deadline by which the second payment on account must be made. This is a frequently misunderstood element of the Self Assessment process – but one with which taxpayers must comply if they are to stay on the right side of the law.
The payment on account is designed to help Self Assessment taxpayers spread the cost of their tax bill. It is made twice a year: once on 31 January, and once on 31 July.
Payments on account are made by those whose tax liability for the previous tax year exceeded £1,000. Those who paid more than 80 per cent of their total tax liability through deductions at source are exempt from the requirement to make payments on account.
The payment on account is usually equal to 50 per cent of your total income tax and Class 4 NICs bill for the previous tax year. Today’s deadline is for payments on account relating to the 2011-12 tax year.
Penalties may be charged for late payment. Interest will also be automatically levied on outstanding sums. If you are in any doubt about your obligations you should seek advice from your accountant, or contact HMRC direct.
Read more about the payment on account.