31 July: Can you elect to reduce your tax payment?

9th July 2019

Most individuals who are required to prepare and submit a self-assessment tax return to HM Revenue & Customs in each tax year should now be preparing for their next half-yearly tax payment which is due by July 31.

 

This tax is the second payment-on-account for the 2018/19 tax year. It is automatically calculated as half of the total tax liability for the previous tax year, assuming that was greater than £1,000.

 

For those taxpayers who ‘believe’ their tax will be lower in 2018/19 than 2017/18, perhaps due to lower income levels, higher tax reliefs claimed or more tax collected at source, there is an opportunity to reduce this July tax payment.

If this is relevant to you, this reduction can be achieved by either submitting your 2019 tax return, which shows lower tax due, by July 31, or by completing an SA303 election and submitting this to HMRC. This can be completed in writing or online.

 

If your belief that less tax is due subsequently proves to be incorrect, then the underpaid tax will immediately become payable, together with interest at 3¼%. In addition, HMRC have the power to also raise a penalty if they judge that you have been negligent or fraudulent in making the SA303 election.

 

In certain circumstances, actions can still be taken after the 5 April 2019 tax year end that will result in carry-back claims which can be used to reduce the July tax payment. These include:

 

  • Making charitable donations,
  • Taking relief for next year self-employed trading losses,
  • Crystallising a capital loss on subscriber shares,
  • Making EIS or SEIS investments.

 

As always with tax compliance and planning, if you are in doubt or need assistance, seek professional advice.

Disclaimer - All information in this post was correct at time of writing.
Other Blogs
Nick Edgley
26th February 2024 Short Term Lets and Airbnb: Planning Permission

Thinking of offering your property for short term lets? Planning permission may be required.   What’s Changing? From this summer the Government will introduce legislation to require owners of new short term lets in England to secure planning permission to use their properties for this purpose. You will need to be aware of this requirement…

Maddie Milner
22nd February 2024 Companies House fees increasing

From 1st May 2024, Companies House fees are increasing. These increases are following the announcement of the Economic Crime and Corporate Transparency (ECCT) Bill, which is giving Companies House greater powers in verifying the accuracy of information and tackling economic crime.   Some of the main rises in costs are as follows:   New fee…

Louise Bassett
21st February 2024 How is the government supporting farmers?

Let’s ask the question, ‘How is the government supporting farmers?’   DEFRA shared a press release from the Prime Minister yesterday, citing his and his party’s commitment to farmers and rural communities.   We already know that Sustainable Farming Incentive (SFI) and Countryside Stewardship payments are being increased across the board by approximately 10%, but…

Shamus Chaplin
20th February 2024 Update on Double-Cab Pick-Ups: HMRC are reversing

Update on Double-Cab Pick-Ups   On the 12th February 2024, HMRC announced that their interpretation of the legislation had changed regarding the favourable tax treatment of pick-up trucks from 1st July 2024. However, after consulting farmers, construction workers and other industry professionals they have now reversed their decision!     Current Position HMRC interprets the…

Ian Piper
19th February 2024 SME Ely Business Awards 2024: 1 Week Left To Enter!

There is just one week remaining to enter the SME Ely Business Awards for 2024!   Celebrate your business’ achievements and be in with a chance of winning by entering today. Entries close on Thursday 26th February 2024 at 3pm. Find Out More Click here to find out more about the SME Ely Business Awards…

Maddie Milner
16th February 2024 Companies House changes from 4th March 2024

,Find out more about the upcoming Companies House changes from 4th March 2024 here.     Registered email addresses One of the main changes from the 4th March 2024 are Companies House require all companies to provide a registered email address which will be collected within your companies next Confirmation Statement.   New companies will…