Self Assessment taxpayers are usually required to pay their income tax liabilities in three instalments each year. The first two payments are due on:
- 31 January during the tax year e.g. for 2016-17 the first payment on account is due on 31 January 2017.
- 31 July following the tax year e.g. for 2016-17 the second payment on account is due on 31 July 2017.
These payments on account are based on 50% each of the previous year’s net income tax liability.
In addition, the third (or only) payment of tax will be due on 31 January following the end of the tax year e.g. for the 2015-16 tax year a final payment is due on 31 January 2017. This is the same for any CGT due and also the date for the first payment on account for 2016-17.
No payments on account is required where a taxpayer’s net Income Tax liability for the previous tax year is less than £1,000 or if more than 80% of that year’s tax liability was collected at source.
Taxpayers that make payments on account should be aware that the second payment on account for 2015-16 is due on 31 July 2016. The amount due for payment at the end of this month should be the same as the payment made on 31 January 2016 in relation to the 2015-16 tax year. Any balancing payment due for 2015-16 needs to be made by 31 January 2017.
There are penalties for late payment of tax due and we would strongly advise all our clients to ensure they meet these payment deadlines.