Self Assessment - Payments on Account

by Lindsay Roadnight

last updated: 06/01/2022

Once you have completed and submitted your self assessment, HMRC will calculate your tax liability.  Your tax is due to be paid to HMRC by 31st January after the end of the tax year.

Tax YearStart DateEnd DateSelf Assessment Submission DateTax Payment Date
2020 / 20216th April 20205th April 202131st January 202231st January 2022
2021 / 20226th April 20215th April 202231st January 202331st January 2023

If your tax liability is more than £1,000, you may be asked to make payments on account.  This is where you make two payments towards the following years’ tax liability.  This is known as Payments On Account (POA).  HMRC assume that your tax liability for the following year will be the same as it was for the current year.  The POA is split into two payments, the first payment (50%) is due with your current tax liability on 31st January and the remaining 50% is due 6 months later.

This can come as a surprise to many people and it may seem unfair that you are asked to pay twice.  But if you follow the worked examples below, you can see that the figures work out across several years.

Worked Example

This person has completed their Self Assessment for the Tax Year 2020 / 2021.  They have no existing payments on account.  Their Tax Liability for the year 2020 / 2021 is calculated as £1500.  As this is over the £1000 limit, they are liable for payments on account.  HMRC will assume that their tax liability for Tax Year 2021 / 2022 is also £1500.

On 31st January 2022, this person will owe HMRC £2250.  This is their existing tax liability (£1500) minus any payments on account (£0), plus 50% of their estimated Tax Liability (£750).

On 31st July 2022, this person will owe HMRC the remaining 50% of the estimated Tax Liability (£750)

Assuming the person makes each payment when due, this is how their Tax Account will look at 31st July 2022.  They will have paid their existing liability in full and they will have accrued £1500 Payment On Account.  The POA amount will be held towards their next tax payment which will be due on 31st January 2023.

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