Home Business News Self -assessment taxpayers need to make their second tax payment by 31 July or face interest charges

Self -assessment taxpayers need to make their second tax payment by 31 July or face interest charges

by LLB Finance Reporter
26th Jul 22 12:58 pm

Self-Assessment taxpayers who had tax underpayments when filing their 2020/21 UK tax returns need to make their second payment on account for the 2021/2022 tax year by 31st of July or face interest charges, say leading tax and advisory firm, Blick Rothenberg.

Robert salter, a client services director at the firm said: “For those self-assessment taxpayers who are required to make payments on account, it is important to ensure that they do make the necessary payment by the end of July. If they don’t make the payment by this date, it can create additional liabilities. Interest charges for the 2021/22 UK tax year may be backdated to the July POA deadline and may also raise the individual’s ‘profile’ with HMRC and hence increase the possibility of them being subjected to a tax audit.”

Robert said: “Some taxpayers don’t realise that they need to make payments on account and can be caught out so they should check whether they need to make a payment.”

He added:” Those that can be caught out include those with (a) high-levels of personal investment income, e.g., bank interest or dividends), (b) those who receive income from letting, (c) the self-employed and now increasingly those who are caught by particular ‘pinch points’ in a tax system which is increasingly unfair, complex and difficult to navigate.”

Robert said: “For example, someone on £58,000 per annum with three children and in receipt of child benefit, could easily be liable to complete an annual UK tax return and have a subsequent obligation to make subsequent POAs to HMRC, because of the ‘child benefit clawback’ which applies for those families in receipt of the benefit, where one spouse or partner earns at least £50,000 per annum.”

“Payments on account aren’t required by all taxpayers within the self-assessment tax return system – e.g., those with income tax liabilities of under £1,000 for the 2020/21 UK tax year or who were liable to CGT rather than income tax on their last return – won’t need to make any payment on account at this stage.”

Robert added: “Taxpayers experiencing financial problems now shouldn’t just ignore their POAs – rather, they should pro-actively contact HMRC, so that they can talk through their position. They may, for example, mean that they can agree a ‘payment plan’ with HMRC, which could enable them to make the relevant tax payments over a longer period.”

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