HMRC error affects payments on account bills for some taxpayers

Some taxpayers may not receive a bill for payments on account this month, and face paying a higher bill in January 2020.

The Association of Taxation Technicians (ATT) is advising individuals affected by an error with HMRC’s systems to set aside money to pay the bill in full.

Most people who complete self-assessment pay their taxes in two instalments every six months, called payments on account.

These advance payments are based on the individual’s tax liability for the previous year, and are paid in January and July, followed by a final balancing payment the following January.

But a system error at HMRC in January 2019 meant some taxpayers’ self-assessment statements did not include their first payment on account.

Unless those affected contacted HMRC at the time, they will not receive a bill for their July payment on account, and will be billed the full amount of tax in January 2020.

Voluntary payments can be made, but there is a risk that HMRC will consider it an overpayment and automatically refund it.

Jon Stride, co-chair of the ATT’s technical steering group, said:

“While it might be tempting to think that not receiving a tax demand is a good thing, all affected taxpayers must pay their 2018/19 bill in full by 31 January 2020.

“If a taxpayer does not make any payments on account during 2019, their tax bill in January 2020 could be significantly larger than they expect.”

Get in touch to discuss payments on account.