HMRC are currently sending out reminders to taxpayers within the Self Assessment system that they have a tax payment becoming due on the 31 July 2014.
This payment is the second ‘payment on account’ (POA) of your tax liability for the tax year to 5 April 2014.
If you are a K&H client we will be confirming the amount you need to pay well before the 31st July.
It may be possible to avoid or reduce this payment. Here’s how.
1. Complete your 2014 Tax Return now. If it shows a tax liability that is less than the tax bill for 2012/13 you will pay less tax on the 31st July. Completing the return will not normally increase the amount of tax payable.
This has the added advantage of putting to bed your personal tax return for another year and it will also tell you the amount of tax you will be paying in January or July 2015.
2. If you cannot complete your 2014 Tax Return but you do expect your 2013/14 Tax bill to be less than the amount paid during the year to 5th April 2013 you can ask the tax man to reduce the POAs.
Be warned: if it turns out you should have paid the original amounts after all, you will have to pay interest on the difference between the amount you should have paid and the amount you have actually paid.