What are payments on account?

If your personal tax bill for the year ended 5th April 2022 exceeds £1,000, you will likely be required to make payments on account of the year ended 5th April 2023. This will be made up of half your future tax bill upfront in January 2023, and another half in July 2023. This means that by the 31st July 2023, you should have paid HMRC the equivalent tax for the year ended 5th April 2023, as you did for the year ended 5th April 2022.
Payments on account of the year ended 5th April 2023, will be used to offset any liability owed for the year ended 5th April 2023. If you owe less tax next year, you can request a refund when submitting your tax return next year, or pay the difference of any additional tax.

When are the payments on account due?

The first payment on account for the year ended 5th April 2023, is due by the 31st January 2023, along with any liability due for the year ended 5th April 2022.
The second payment on account for the year ended 5th April 2023, is due by the 31st July 2023.

How much do I owe and where do I make the payment?

If payments on account are required, HMRC will have written to you at your home address requesting payment of this, prior to the deadline. If you are unsure of how much to pay or have not received a statement from HMRC, please speak with your dedicated accountant for payment details and advice or check your completed Self-Assessment Return, for the year ended 5th April 2022.
If your personal tax bill for the year ended 5th April 2022 exceeded £1,000, you will likely be required to make a payment on account of the year ended 5th April 2023.

I think I have paid too much tax, what can I do?

Please get in touch with your accountant as soon as possible. It is normally possible to reduce the payment on account, if your tax return for the year ended 5th April 2022, is completed prior to the deadline of 31st July 2023. If you make payment of the liability now and your calculated liability is less than the payments on account made, a refund can be requested when the tax return to 5th April 2022 is submitted.

I don’t think I have paid enough tax, what can I do?

The current payment on account is calculated based on the tax return submission for the year ended 5th April 2022. Any additional tax due for the year ended 5th April 2022 will be due by the 31st January 2023, along with a payment on account of the year ended 5th April 2023, if required.

What if I made payments on account last year?

Any payments on account made last year on account of the tax return ended 5th April 2022, will be offset against the tax liability for the year ended 5th April 2022. If you earned a similar level of income in the year ended 5th April 2022 as you did for the year ended 5th April 2021, once you have made the second payment on account in July 2022, you will only need to pay the balancing tax by 31st January 2023, along with the first payment on account for the year ended 5th April 2023.

I am not sure if I have already made the payment or if one is even required?

Please check with your dedicated accountant or log into your personal tax portal, for an up-to-date summary.

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