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  • Mr Paul Clifton

A reminder to pay your tax bill

Second payment on account due shortly

Self Assessment income tax 2nd payments on account are due by 31 July 2023

We would remind you that if you have a Self Assessment second payment on account tax liability to pay that it needs to be paid by 31 July 2023. After that date, you will be charged interest. Payments paid late will be subject to interest at 7.5% pa i.e. the Bank of England base rate plus 2.5%.

H M Revenue & Customs can be poor at sending out letters to tell you that you owe tax. We know this from the number of clients that say they have not paid their tax liability on time because they never received a reminder letter.

If you have a Government Gateway account, you can check your tax liability online.

Payment based on Tax Return for 2021-22

It may have been many months ago, and could even be well over a year ago, that your Self Assessment Tax Return for 2021-22 was submitted. You may have completely forgotten that you have a tax payment to make by 31 July 2023. This is when any second payment on account for the 2022-23 tax year is due, but which is normally based on your 2021-22 Tax Return.

If you think that your taxable income in 2022-23, and the resultant tax due, is going to be less in 2022-23 than 2021-22, you can prepare your Tax Return for 2022-23 now and validly reduce the payment on account due by the end of this month.

If you have still not paid your Self Assessment tax liability for 2021-22 (yes, last years’ tax bill) by 31 July 2023, you will also be charged a 5% surcharge, as well as interest, on any tax still outstanding at 1 August 2023.

Time to pay

If you are struggling to pay your tax liability on time, you can contact HMRC to arrange a scheme of arrangement. If accepted, you could pay your tax liability over a number of weeks or months. You will still be charged interest, but you will avoid the 5% surcharge on any tax outstanding.

The HMRC Payment Support Service can be contacted on 0300 200 3835.

You could instead set up a Self Assessment Time to Pay plan online, without having to speak to anyone at HMRC (if you can wait an hour on the phone for then to pick up). Click this link to go to their Time to Pay website and do it all online.

Paying your Self-Assessment tax

You have a number of options to pay your Self-Assessment Tax amount. They are shown on the HMRC website.

If you choose to pay by faster payments, online through your bank account, you’ll need the following details.

Sort code: 08-32-10

Account number: 12001039

Account name: HMRC Cumbernauld

Reference number: 10-digit Unique Taxpayers Reference + letter K (*)

Amount due: £

(*) Your Self Assessment payment reference is your 10-digit Unique Taxpayers Reference with the letter ‘K’ at the end of the reference e.g. 1234567890K. Unlike for Corporation Tax payments, you use the same reference each year for ALL your Self-Assessment tax payments.

Tax Return for 2022-23

The deadline to complete and file your Tax Return for 2022-23, i.e. for income and profits for the year ended 5 April 2023, is 31 January 2024. This is also the same date that any final balancing payment is due based on the 2022-23 Tax Return.

The sooner your Tax Return is filed the better. We may even identify a tax planning opportunity, which would be better done sooner rather than later. You may also be due a tax refund, only be returned to you once your Tax Return is submitted.

As clients start to go on their summer holidays, clients often neglect their Accountant. We are not talking about buying them a sangria or a sun hat. The summer can be a quiet time and where I can catchup on many Annual Accounts and Tax Returns and therefore avoid that awful busy time in the build up to Christmas that then runs into January.

Take some practical steps; and let’s work together to get as many Tax Returns completed and submitted over the late summer period and well before Christmas.

HMRC’s and our own busiest time is Christmas/January. If something goes wrong and we need to contact them, you might find it hard to get matters resolved.

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