Now that the 2023/24 tax year is well-underway, those all-important tax deadlines you’ve been anticipating are rearing their head.
As a self-employed taxpayer, one of the most important dates creeping ever-closer is your payments on account deadline.
But when is the payment on account deadline? And what can you do to ensure you don’t miss it? This article will tell you all you need to know.
What is payment on account?
Put simply, your payment on accounts deadline is the cut-off point for settling your outstanding self-assessment tax balance. As well as income tax, you’ll have to pay any owed class 4 National Insurance contributions.
Every year, you’ll have two of these deadlines. The first falls on 31 January for your previous tax year, and the second on 31 July.
If you still have an existing balance after your two payments on account deadlines, you’ll need to settle your bill by midnight on 31 January the following year.
Your deadlines may vary depending on when you set yourself up as a sole trader. For example, if you were to register as self-employed in November 2023, you won’t need to make your first payment until 31 January 2025.
How to pay
In order to check your current balance and make a payment, you’ll have to sign in to your online HMRC account. In the portal, you’ll be able to check how much you owe as well as any further details of your most recent self-assessment.
If your tax bill is less than £3,000 and you submit your return in December, you can pay your balance via your tax code. This will mean your payments are deducted from your wages or pension on a schedule you organise with HMRC.
Sometimes, though, you may need help meeting your payment obligations.
Reducing your payment on account
Business isn’t always consistent — the past few years have proven this time and time again. If you suffer a significant income loss or have to pay increasing bills to suppliers, you can approach HMRC.
You can take steps to ensure this doesn’t happen, though.
Get an early start on your tax planning
There’s nothing worse than feeling like you’re playing a constant game of catch-up — especially when finances are involved.
The good news is that you can get a head-start on your self-assessment as soon as the new tax year rolls around. In fact, we heavily recommend that. Planning your taxes as soon as possible can put you in good stead for the rest of your fiscal year.
Not only will you be able to plan for your payment on account deadlines, but you’ll also be able to find out if HMRC owes you a tax refund sooner. If you don’t want to do it alone, your accountant will be happy to help.
Don’t miss your deadlines
Settling your outstanding tax bills isn’t optional. But you can choose how to handle them. By getting in touch with an expert accounting firm (like us), you’ll be able to mitigate any risk of missing those all-important tax deadlines.
Get in touch if you need help meeting your bi-annual payment on account deadlines. We’re always happy to help.