If you’re self-employed then you need to be aware of the upcoming self-assessment tax deadline of 31 July.
Many people forget about this mid-summer date as most are focused on the January deadline but all self-assessment filings are vital if you don’t want to get in trouble with HM Revenue & Customs.
The July deadline was initialling set up to help sole traders pay over the entire year instead of being left with a massive bill to pay in just one lump sum.
There are 2 instalment deadlines – 31 January and 31 July.
Want more? Read An Easy Guide to Making Tax Digital
You usually have to make 2 payments on account every year and these consist of 50% of your tax bill from the previous year.
Here is an example from Gov.UK:
Your bill for the 2017 to 2018 tax year is £3,000. You made 2 payments on account last year of £900 each (£1,800 in total).
The total tax to pay by midnight on 31 January 2019 is £2,700. This includes:
- your ‘balancing payment’ of £1,200 for the 2017 to 2018 tax year (£3,000 minus £1,800)
- the first payment on account of £1,500 (half your 2017 to 2018 tax bill) towards your 2018 to 2019 tax bill
You have to pay your second payment on account of £1,500 by midnight on 31 July 2019.
If your tax bill for the 2018 to 2019 tax year is more than £3,000 (the total of your 2 payments on account), you’ll need to make a ‘balancing payment’ by 31 January 2020.
How do I pay my tax bill?
You can fill out and file your Self-Assessment online through the HMRC website (you’ll need to register and sign up for an account) where you’ll have the opportunity to make your payment on account at the same time as paying your balancing payment for the last tax year. If you’d rather pay by post, you’ll need to obtain a Bank Giro form.
It’s worth noting that if you overpay, HMRC will send you a refund, and if you underpay you’ll be charged interest.
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