An expert has released comments to warn Brits of the upcoming ‘payments on account’ deadline, explaining who needs to pay it and the consequences of missing it.
Midnight of 31st July 2023 is the payment on account deadline. Given the current economic climate, it’s important not to miss it, or you may risk incurring unnecessary interest or fines.
Dan Whittaker, Personal Finance Expert at Little-Loans.com, has released comments explaining the payments on account deadline.
When is the payments on account deadline, and what do I need to do by then?
“Payments on account are advance payments that you are required to make towards your Self Assessment tax bill. These payments are required twice a year – the first on 31st January, and the second payment must be made by midnight on 31st July 2023. By this deadline, you should have paid the required amount to HMRC.”
How do I go about making this payment?
“You can make this payment in three different ways, but it’s important to ensure that the method of your choosing allows the money to be processed before the deadline.”
“The first way to make this payment is by Faster Payments, which is online or telephone banking. Using this method means your payment should reach HMRC on the same day or the following day, which includes weekends and bank holidays.”
“You can also make a CHAPS payment which is expected to reach HMRC on the same working day, so long as you pay within your bank’s processing times. Finally, you can make a Bacs payment; however, this usually takes three working days.”
“You can find details of where your payment needs to be sent on the gov.uk website. You will need to use your 11-character payment reference when you pay, which is your Unique Taxpayer Reference number, followed by the letter ‘K’.”
Who is required to make this kind of payment?
“Payments on account are required to be paid by anyone who pays the majority of their tax through Self Assessment. Typically, this would be someone who earns the majority of their income through self-employment.”
“The deadline applies to self-employed people, unless your last Self Assessment bill was less than £100, or you paid more than 80% of the tax you owed the year prior.”
What happens if I miss the deadline?
“If you miss the payment deadline, you will be charged interest on the outstanding amount until the payment is made. As of 11th July 2023, the late payment interest rate is 7.5%. If the outstanding payment is still unpaid 3 months after the payment deadline then you could also be charged a late filing penalty fee of £100.”
“If you do miss the payment deadline, try to make the payment on account as soon as you can. If you are having trouble making the payment due to financial difficulties then you can contact HMRC here to arrange a payment plan.”
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