Reminder that second payment on account is due 31st July

Self-employed workers are being reminded that the second payment on account for 2020/21 is due by 31^st July 2021.

Although self-assessment payments on account for July 2020 were automatically deferred until January 2021, this is not the case for the second payments on account for 2020/21, which are still due at the end of the month.

The Low Income Tax Reform Group (LITRG) is urging people not to ignore the tax payment, and if you are struggling to pay, contact HMRC as soon as possible to discuss the possibility of arranging instalments.

HMRC has said that they will have a sympathetic approach to such requests due to the current economic situation.

Victoria Todd, Head of LITRG, commented, “If you have already submitted your 2020/21 tax return, then your second payment on account amount will be recalculated by HMRC based on the information on the tax return and so the amount due on 31^st July should be correct. Therefore, if you have not yet filed your tax return for 2020/21 you should consider doing so before 31^st July.”

Todd added, “If you cannot file the 2020/21 tax return in the next few days but think your tax bill for 2020/21 will be less than that for 2019/20, your payments on account may be higher than they need to be. In this case, you may be able to make a claim to reduce the level of the second payment on account for 2020/21. We explain how to do this on our website.

“It is also important to factor any coronavirus support payments that are taxable in 2020/21, such as the first three payments under the Self-Employment Income Support Scheme, into calculations when working out whether you can reduce your 2020/21 payments on account.”

To find out more about contracting please contact Jaime on 01442 795 100 or email jaime.thorpe@dolanaccountancy.com.