31 July: Second Payment on Account Deadline

The personal tax second payment on account deadline is approaching (31^st July 2024).

Payments on account are advanced payments towards your tax bill for the tax year just ended, and each payment on account is calculated as half of your previous year’s Income Tax and Class 2/4 National Insurance liability. For the payment due by 31^st July 2024 this will be an advanced payment towards your 2023/24 tax liability.

Your Whitings contact will be sending out a payment reminder shortly with the details of how much you need to pay and what payment reference is needed, these details are also shown on your tax return letter or email with your 2022/23 tax return.

If you wish to make the payment on account now, you can log into your Personal Tax Account and pay online, through the HMRC app or using one of the following payment methods:

Same or next day payment

You can pay:

• through your online bank account
• using online or telephone banking (Faster Payments)
• by CHAPS
• by debit or corporate credit card online
• at your bank or building society

You need a paying-in slip from HMRC to pay at a bank or building society. If needed, your Whitings contact can provide you with this on request.

3 Working days 

You can pay by:

• Bacs
• Direct Debit (if you’ve set one up with HMRC before)
• Cheque through the post

5 Working days

You can pay by:

• Direct Debit (if you have not set one up with HMRC before)

These payment methods can also be found on the government website: https://www.gov.uk/pay-self-assessment-tax-bill

Reducing what you pay

The amount payable is automatically calculated as half of the total tax liability for the previous tax year, assuming that was greater than £1,000 and less than 80% tax was collected at source from income.

For those who believe their tax will be lower in 2023/24 than 2022/23, due to lower income levels, higher tax reliefs claimed or more tax collected at source, there is an opportunity to reduce the July tax payment.

If this is relevant to you this reduction can be achieved by either:

1. Submitting your 2024 tax return, which shows lower tax due, by 31 July,
2. Making an online election to reduce the payment on account, or
3. Submitting an SA303 election to HMRC.

In certain circumstances, actions can still be taken after the 5 April 2024 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 the following year’s trading loss,
• Crystallising a capital loss on subscriber shares,
• Making EIS or SEIS investments.

Get In Touch

For more information or advice, contact your local Whitings LLP office today!

Disclaimer - All information in this post was correct at time of writing.