The second annual deadline to submit advance payments towards your self-assessed tax bill for the previous year is due on 31 July 2017.
‘Payments on account’ take place every six months – on 31 January and 31 July – and include class 4 national insurance contributions if you’re self-employed.
Each payment is half your previous year’s tax bill and payments are due by midnight on both dates.
Any tax left over after you’ve made your payments on account needs to be paid as a balancing payment by 31 January next year.
Those already registered for self-assessment with HMRC can check on any payments owed through their online account.
Payments on account can be made using the following methods:
- debit or credit card
- online banking.
Failure to pay your tax bill by the deadline will result in interest being added from the date your payment is due. The current interest rate on late payments is 2.75%.
Digital accounting update
The way you pay your tax return will soon change under Making Tax Digital (MTD), which requires businesses, self-employed people and landlords to use digital accounting software to update HMRC on a quarterly basis.
MTD is due to be phased in from April 2018, although businesses with an annual turnover below the VAT threshold (£85,000 in 2017/18) are exempt until April 2019.
If your annual turnover is less than £10,000 you will not need to make quarterly updates.
It would be best to get in touch with an accountant to discuss how MTD may impact your reporting obligations.
Contact us to discuss your self-assessment.