Payment on Account | next one due 31st July. Or is it?

Background

The 2nd payment on account relating to income tax for the tax year 2018/19 is due by 31st July 2019.

For Salonfrog Clients who have our Personal Tax Return bolt-on service, they already know the amount they need to make.

For everyone else, you should check your HMRC tax account (or refer to the Statement of Account HMRC may have sent them).

However, there have been problems with HMRC’s self-assessment system, which means many tax payers have not been requested any payment on account.

Houston, HMRC has an issue…

In January 2019 HMRC’s self-assessment system failed to generate payment on accounts for 2018/19 for some taxpayers. At the start of the year, HMRC worked with Agents (like Salonfrog) to rectify this – but only where either the tax payer or the Agent insisted on payments on account being set up.

However for many, this was not done and the 1st payment (due back in January 2019) was missing, with the 2nd payment (due by 31 July 2019) also not fixed.

So what does this all mean practically?

If you expected to make a payment on account but your Account shows none is due, you do not need to make a payment by 31 July this year. However, this does mean that all of your 2018/19 tax bill will now be due in January 2020 and you should ensure that you budget for this.

HMRC has said it will not create a payment record unless a payment has been made and interest charges could apply; however any payment you do make will be credited against the total liability due by 31 January 2020.