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Self-assessment Payments on account

Self-assessment payments on account

‘Payments on account’ are advance payments towards your tax bill
You have to make 2 payments on account every year unless your tax bill is under £1,000 or you have 80% of your tax collected through PAYE.
Each payment is 50% of your previous year’s tax bill. Payments are usually due by 31 January and 31 July.
Example
You are entering the payments on account system for the first time.
Your tax bill for the 2019-20 tax year is £4,000.  You would need to pay £4,000 by 31 January 2021 and the 1st payment on account for the 2020-21 tax year of £2,000.  Total payment due 31 January 2021 = £6,000.  2nd payment on account of £2,000 would be due 31 July 2021.
If your actual 2020-21 tax bill is higher, you pay a balancing tax payment on 31 January 2022 or if your tax bill is lower, HMRC will issue a refund.




 

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