When do I pay my tax return bill?

And we are going to quickly look at when you have to pay your self assessment tax return bill. People are often worried that if they do their tax return early, then they need to pay the bill early. And that is so not the case. But if you do your tax return early, and the taxman owes you money, you get that fairly quickly. So sometimes it’s better off to do your tax return early, get some money back and you go, Whoa, I’m in the money go shopping. So well, that’s what I would do anyway. Okay, so there’s a lot of information on here. So I will go through it very slowly. So the tax year ends on the fifth of April, and the new tax year starts on the sixth of April. Funny that so you can do your tax return anytime between the sixth of April and the 31st of January following. So therefore, you can pay your tax bill anytime between the sixth of April and the 31st of January. But obviously, in order to pay the bill, you actually have to have submitted the tax return first. Don’t forget, you do have to submit it, not just fill it all in, get the calculation, get a copy of the return, there is a button that says submit your tax return. Okay. So HMRC do not send an invoice, they don’t send you a bill. Sometimes they do send a statement, if you’ve done your tax return, by the end of May, beginning of June, you might get a statement at the end of June showing when you want to be paid by July. And the same thing you might get one in November if you’ve done your tax return in October, or maybe early November, but it’s not guaranteed. So whatever you do, complete your tax return. Keep a copy of it, make reference to the calculation but always, always, always make sure you have access to your online account. And then you can see how much you owe you owe HMRC so you know what to pay. Okay. So I’ve mentioned a few dates there, all of a sudden you think well what’s going on. So the 31st of January is the deadline for the tax return and for the payments. But you have to be aware on the payment date does vary slightly. So it depends on what method you use to pay it. It might be a case of if you do it by bank transfer on the 31st. So it effectively leaves your account on the 31st but that happens to be a Saturday HMRC will include that as they received on the 31st. But if you wrote a check and posted it on the 31st and it doesn’t get received until the third of February, they might class that as being late because they haven’t received it. So be very very aware on the method of payment. And how early you have to then pay the bill to reach HMRC by the 31st of January or for it to be included as received by the 31st of January. Okay. So what you have to pay by the 31st of January well this is what we call your in your tax bill. So this is how much you owe them based on the tax return you have done it for that year. Don’t forget it’s always going to be nine months over nine months late so at the moment we’ve just started filing for tax year 2020 21 which has to be done by and paid by the 31st of January 2022. So the in year bit is how much you owe for the tax year 2020 to 2021. Okay, there is a case of if you owe HMRC more than 1000 pounds of income tax and class for National Insurance then you will have to pay what they call the first payment on account. Yes I know it says fist ever Sorry, I’m not going to change it now. But if you pick up all you have to pay the first payment on account for the next tax year. So if you owe more than the 1000 pounds you have to pay 50% of what your tax bill is. So therefore you can look at it oh my in your tax bill is 2000 pounds. You have to pay 50% upfront of that amount again which then makes 3000 pounds to be paid by the 31st of January. Okay, there is a second payment on account the extra 50% that has to be paid by the third first of July. Now, one thing people do forget is they’ve made a payment on account. So therefore, come the 31st of January. The following year, they can deduct the payments on account they’ve already made for that tax year. I know this gets very complicated, it will be much easier with numbers and figures and a demo in front of you. But we don’t have those facilities. So 31st of January, you have to pay the in year tax bill and also potentially 50% of the following year’s tax bill HMRC always assume your income and your therefore your profit will be the same year on year. Pretty obvious for some industries that have been tied down and not able to work. That is not the case for 2021 22 or 2020 2021. So my advice is always then Okay, get your tax return done earlier. And that might reset how much you have to pay as a payment on account for the 31st of July. And potentially, you might have already paid enough to cover all your tax bill for that year. So if you do do your tax return by say the end of June, it might make the July payment go down, it might make the same, but it definitely won’t make it go up. You never know you might get a tax refund. I’m quite sure this has not made too much sense to some people. So by all means get in touch. But there are other videos you can look at to help explain some of the things I’ve just talked about. So what we’ve got here is what is the payment on account. So it’s better explained in the video you can see the link on the on display. How to find out how much you owe HMRC you can use your online account to do that. And there’s a video link to show you how to get into your online account and how to see how much you owe HMRC and there’s also a video on how you can pay HMRC the different methods and I think it also goes into what is considered paid when you actually make the payment so is it based on the date you make the payment or is it based on the date received by HMRC so I hope that helps so your definite payment dates are the 31st of January for the main tax bill. And any payments on account will then be the 31st of July and also the 31st of January. Any problems feel free to give us about by them

Transcribed by https://otter.ai

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