Help with your Tax Return guide
You are responsible for paying the right amount of tax at the right time. It is not HM Revenue and Customs’ job to remind you – or to let you know how much tax to pay. There are many ways to pay what you owe – you do not need a payslip if you pay electronically. See https://www.gov.uk/pay-self-assessment-tax-bill.
If you send your paper tax return in late, HM Revenue and Customs will still work out your tax for you. But you will have to pay interest if you did not pay enough tax by the deadline. You will also be charged late payment penalties if your payment is 30 days late or more.
If you do not pay the amount of tax due by 31st January, HMRC will start charging interest. If you have not paid the tax within 30 days (by the start of March), they will impose a 5% penalty. This is followed by an additional 5% if you’ve still not paid within 6 months. If the tax is still unpaid after 12 months, there is an additional 5% charge. These amounts are not charged on payments on account (see below).
If you have sent in your self assessment return but have not had a statement or payslip from HMRC before the due date of 31 January do NOT delay paying. Under self assessment it is up to you to pay the right amount of tax at the right time.
Similarly, if you cannot get your return done in time but have some idea of what you might owe, pay this anyway by 31 January to minimise interest and late payment penalties. Late filing penalties will still apply, so consider filing your return using an estimated figure, tell HMRC on the return that you have done this, and amend the return as soon as possible afterwards; it would be worth taking professional advice before doing this.
If you are having trouble paying your tax bill,see our Tax Debt Guide for help.
Payments on account:
Under self assessment, tax and class 4 national insurance contributions are due on the 31st of January following the end of the tax year. From 2015-16 onwards, class 2 National Insurance will also be due by 31 January filing date.
If your liability for the year comes to more than £1,000 (unless more than 80% of your tax liability was met by tax deducted at source such as PAYE), then you will also have to make payments on account for the following tax year. The payments on account are half of the tax you owe for the previous year. Payments on account are payable on 31 January and the following 31 July.
If you think your income may be lower in the following year, you can apply to reduce the payments on account at any time (not just when you send the return in). But if you reduce them by too much, there will be interest back to the original date for payment.
For more information about payments on account, including how and when you may ask for payments on account to be reduced, see the information pages on being self-employed.
So under self assessment, you usually pay the tax due for each tax year in three instalments. The first two are payments on account of tax due for the current tax year. These are estimates based on the previous year. Each payment is half the tax (and Class 4 National Insurance if you are self-employed) due for the previous year, less tax paid by deduction at source. You then pay the balance of tax due by 31 January following the tax year end. If you have paid too much tax ‘on account’, you will get a repayment.
For example, the tax on Brigitte’s income payable under self assessment for 2014/2015, totalled £2,600. Her payments on account due for 2015/2016 are:
- 31 January 2016 – first payment on account – £1,300
- 31 July 2016 – second payment on account – £1,300
- 31st January 2017 – Brigitte submits her tax return and pays any outstanding tax due for the year 2015/16, or gets a repayment if her final liability turns out to be less than the payments on account.
Note:If you had any capital gains tax to pay for the previous year, this is ignored in working out your payments on account. The same applies to student loan repayments.