- Payment on account refers to advance tax payments made to HMRC twice yearly, in January and July, towards an individual's upcoming self-assessment tax bill.
- These payments are mandatory for self-employed individuals whose self-assessment tax bill exceeds £1,000 and less than 80 per cent of their tax was collected at source.
- New self-employed individuals must make their first payment on account when submitting their initial self-assessment return, alongside any tax owed for the previous year.
- HMRC's initial tax calculation may not immediately reflect previous July payments, but these are correctly credited upon submission; individuals can also apply to reduce payments if their income is expected to decrease.
- If unable to pay, free impartial advice is available from organisations like Business Debtline, and individuals can reduce their tax bill by claiming legitimate business expenses.
IN FULL
Self-employed workers face key tax date next week - and it’s costly to miss
