31st July marks an important date in the self-employed calendar: the deadline for the second payment on account bill.
Here is everything you need to know to ensure your bill is sorted by the deadline:
James Andrews, personal finance expert at money.co.uk, said: “If you are self-employed, it is important you pay your next tax bill by midnight on 31st July or see it rise even further.
“Payment on accounts are advance payments towards your tax bill that are made twice a year, with each payment set to half your previous year’s bill. Every self-employed worker is expected to make these payments, unless they earnt less than £1,000 in the previous year or more than 80% of their tax was deducted at source through PAYE.
“To double check what you owe, just sign into your personal tax account using your Government Gateway ID and view your latest self-assessment return. You will then be able to see your statements, as well as any payments on account you have already made and what is due towards your next bill.
“If you’ve earnt less this year than last, the good news is you can apply to pay less – so shouldn’t lose out. You make the request for a lower payment to HMRC either online or by post.
“If you miss this payment, you will be charged interest on any money owed so it is important you meet the deadline. After 30 days, HMRC will apply interest at 2.75%, and you may have to pay a penalty.
“Remember that if your bill is less than your previous year’s total, you will be given a rebate, but if it ends up being more, you will be expected to make a balancing payment on the 31st January to settle your account.
“Payment is simple and can be done online using debit or corporate credit cards, via bank transfer or direct debit (make sure you allow enough time this to go through, 3-5 working days), in person at your bank or building society, or by cheque through the post.
“For more information or guidance on how to manage your payments if you are struggling after a turbulent year, visit: https://www.money.co.uk/guides/a-beginners-guide-to-self-assessment.htm.”