Managing Your Tax Payments
At this time of year, many taxpayers’ minds will be on 31 July – the due date for the second tax payment on account (POA) for 2018/19.
There will be those who simply pay the tax figure, never questioning whether it’s correct or not. Although it’s important to remember that a tax repayment is often a sign of too much tax being paid in the first place.
In assessing your July payment, there are some factors to consider, such as:-
- Are business results poorer than anticipated?
- Do you have additional tax reliefs following pension or other deductible payments such as loan interest?
- In the prior year, did you receive any one-off sources of income?
- Are there any other factors affecting your circumstances?
Our taxperts would recommend you engage with your accountant in order to assess whether the 31 July payment is correct.
The Association of Taxation Technicians (ATT) also warned that ‘some people may not receive the tax demands they expect by the end of July’ for their self assessment, even if it may be due.
ATT issued a press release stating the HMRC system did not correctly process all the POA information for 2018/19. As a result, the demand for the first payment for January 2019 may not have been issued, and unless those taxpayers contacted HMRC, the next demand for payment, due on 31 July 2019, may also not be issued.
HMRC has confirmed that if it has not issued a demand for POA, the full amount will be requested in January 2020.
Making a voluntary payment may not be processed correctly, so if you want to make a payment for which no demand has been issued, then it is advised you contact HMRC to reinstate your POA. Of course, some clients can find the tax difficult to pay in one instalment so if you require time to make a payment arrangement, ensure you contact HMRC.