If you complete a self-assessment for your business, you may have to pay your tax in two instalments. You don't need to make this payment if your tax bill is less than £1000 or you have already made 80% of your tax bill in advance.
The two payments made to the HMRC are on 31 January and 31 July each year.
What are Payments on Account?
'Payments on account' are advance payments towards your tax bill (including Class 4 National Insurance if you're self-employed). The second payment is due on 31 July 2019 for all those who need to pay and submitted a tax return in 2018-19.
Each of the two payments on account is usually 50 per cent of your previous tax bill; it's a way of paying off some of your tax bills in advance.
The confusion about the 31 July 2019 payment
When the tax returns were submitted, some of you might have noticed that a POA figure for July 2019 was not given. The Association of Taxation Technicians (ATT) have issued a press release about POA. This states that 'some people may not receive the tax demands they expect by the end of July' for their self-assessment, even if it may be due.
There appears to have been a problem with the HMRC system and all the POA information for 2018-19 was not processed correctly.
If you do not receive a demand for payment on 31 July 2019, you will need to make full payment in January 2020 instead. Advice is also being given that you shouldn't try to make a voluntary payment early in case this is not processed correctly.
If you are unsure about what you currently owe for payments on accounts, contact us directly by calling 01623 490 120 or email