Are your payments on account missing?

money

 

A problem with the HMRC self assessment system means some taxpayers who are required to make payments on account were not informed of the amount due for this element by 31 January 2019. This problem won’t be fixed before the next payment on account falls due in July 2019. 

 

 

Self assessment taxpayers are required to make payments on account towards the following tax year where less than 80% of their tax is collected at source (eg under PAYE) and their self assessment tax liability is more than £1,000. The payments on account are based on the tax liability for the previous year, but can be reduced if there is expected to be a reduction in the total tax liability. Payments on account are required for most self-employed individuals and many company directors who extract the majority of their income from their company as dividends.

 

HMRC has confirmed that if the demands for payments on account have been omitted from the taxpayer’s statement, interest will not be charged as long as full payment of all the tax due for 2018/19 is made by 31 January 2020.  This could however have a significant impact on cash flow as a much larger balance of tax will be due in January 2020.

 

Individuals unsure of whether they have paid the correct amount of tax should liaise with their accountant.

 

Lentells are able to advise on all aspects of self assessment. For futher assistance please contact your local Lentells office: