Author: Ketan Umretiya

Self-Assessment taxpayers are usually required to pay their Income Tax liabilities in three instalments each year. The first two payments are due on 31 January during the tax year and 31 July following the tax year.

These payments on account are based on 50% each of the previous year’s net Income Tax liability. In addition, the third (or only) payment of tax will be due on 31 January following the end of the tax year. If you think that your income for the next tax year will be lower than the previous tax year, you can apply to have your payment on account reduced. This can be done using HMRC’s online service or by completing form SA303.

It is important to note that you do not need to make any payments on account where the net Income Tax liability for the previous tax year is less than £1,000 or if more than 80% of that year’s tax liability has been collected at source.

There are no restrictions on the number of claims to adjust payments on account a taxpayer or agent can make. The payments are based on 50% of your previous year’s net Income Tax liability. If your liability for 2020-21 is lower than 2019-20 you can ask HMRC to reduce your payment on account. The deadline for making a claim to reduce your payments on account for 2020-21 is 31 January 2022.

If taxable profits have increased there is no requirement to notify HMRC although the final balancing payment will be higher.

Source: HM Revenue & Customs Wed, 07 Apr 2021 00:00:00 +0100

There are special rules to follow if you have submitted a Self-Assessment return and subsequently realise you need to change it. This can happen if for example you made a mistake like entering a number incorrectly or missing information from the return.

If you filed your return online, you could amend your return online as follows:

1. Sign into your personal tax account using your User ID and password.
2. From ‘Your tax account’, choose ’Self-Assessment account’ (if you do not see this, skip this step).
3. Choose ‘More Self-Assessment details'.
4. Choose ‘At a glance’ from the left-hand menu.
5. Choose ‘Tax Return options’.
6. Choose the tax year for the year you want to amend.
7. Go into the tax return, make the corrections and file it again.

If you opted to file your return on paper, you will need to download a new return and fill in the pages that you wish to change and write ‘amendment’ on each page. You must also include your name and Unique Taxpayer Reference on each page and then send the corrected pages to the address where you sent your original return.

If you used commercial software to submit your Self-Assessment return, then you should contact your software provider in the first instance. If your software provider cannot help, then you should contact HMRC.

The deadline for making changes for the 2019-20 tax year using any of the methods outlined above is 31 January 2022.

If you have missed the deadline, you will need to write to HMRC instead. For example, if you found a mistake in your 2018-19 return after 31 January 2021. In the letter, you will need to say which tax year you are correcting, why you think you have paid too much or too little tax and by how much. You can claim a refund up to 4 years after the end of the tax year it relates to.

Source: HM Revenue & Customs Tue, 30 Mar 2021 00:00:00 +0100