The second income tax payment on account becomes due for payment on 31 July – interest is charged on late payment and penalties can also be levied.
This will, in most cases, be the same amount as was paid “on account” on 31 January. However, it is possible to reduce the amount if it is thought that it could be excessive. The amounts would initially have been calculated based on the total tax liability for the 2020/21 tax year. Circumstances may have changed significantly since the original calculations e.g., the business may have ceased, or suffered a significant downturn in trade in recent months.
Whilst some businesses will have had accounts that determine this liability either completed or drafted, e.g., to 31 March 2022, there will be a significant number that are not up to date for one reason or another.
If you believe that your 2021/22 income is going to be substantially less than it was in 2021/21, let us know and we can review the position and advise if it is possible to reduce the July instalment.
Rest assured that if it is found in due course that tax has been overpaid, it will be refunded to you, but having it in your bank rather than held by HMRC is probably a better option! Cash is King!
