Reducing Payments on Account

Written by yasiradnan94
22 January 2020

The first instalment of your self-assessment tax bill for the 18/19 tax year is due on 31 January 2020.

Each year the self-assessment tax bill due by 31st January includes an amount payable known as a payment on account. This amount is 50% of the tax bill taken in advance by HMRC in January and the balance 50% in July.

If you feel the payment on account is too high then it can be reduced. You can ask HMRC to reduce the payments on account for 2019/20 and this can be done via your self-assessment tax return.

If you ask HMRC to reduce your payments on account and your tax bill ends up being greater than what you pay, HMRC will charge interest (at 3.25% per annum) on the difference between the amount paid and the lower of the original payments on account and your actual tax liability.

AJN Accountants are specialists in helping contractors, freelancers and small businesses to save tax and time.

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