Self Assessment Tax Bill

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Self-Assessment Tax Return

Home / Self Assessment Tax Bill

Updated on : 10-Dec-2024 06:48 PM GMT | 4 min read

Understanding Your Self-Assessment Tax Bill

In case you are filing a paper return, HMRC will send you a tax bill by post whereas if you will send your return online, you can view your tax bill -

After filling your return but before submittingthe same in the section “View your calculation”
In final tax calculation which may take up to 72 hours after submission to be available in your account.

Tax calculation is important and very much needed in case you are self-employed and applying for a mortgage.

Tax Bill

Your bill contains tax you owe to HMRC for the last tax year. This is known as “Balancing payment”. In case your tax bill is more than £1000, it generally includes additional payment towards next year’s bill which is known as “Payment on account”.

If you made “Payment on account” last year

You need to deduct the additional payment i.e. payment on account you made last year from this year’s bill in order to calculate the actual amount of tax you owe this year.

How to check “Payment on account” you made last year

Sign in to your online account
Choose the option to view your latest self-assessment return
Select “View statements”

Pay Your Self Assessment Tax Bill

The last date to pay your self-assessment tax bill is 31st January (following the tax year you are paying for) midnight in order to avoid fines & penalties from HMRC.

Payments on Account

Advance payment made towards tax bill is known as payment on account. It also includes Class 4 national insurance in case you are self-employed. It is mandatory for you to make payments on account every year unless –

Your last self-assessment tax bill was less than £1000
80% of the tax you owe is already paid by you. For ex – Tax paid via tax code or interest already deducted by the bank from your savings.

Each payment is half of your previous year’s tax bill. The due dates for payment of tax bill are 31st January & 31st July midnight.

In case you are still remaining with the tax to pay after making payments on account, you need to make a balancing payment by 31st January midnight next year.

Example– Suppose your tax bill for the year 2018-19 is £4000. The two payments done by you last year valued at £1000 each (£2000 in total). Calculate the total tax you need to pay?

Calculation of Total Tax

As per the example above, the total tax you need to pay on 31st January 2020 is£4000 which includes the following –

Balancing payment of £2000 for 2018-19 tax year (Deduct £4000- £2000)
First payment of £2000 (half of the amount of year 2018-19 tax bill) towards 2019-20 tax bill.

You need to pay your second payment on account of £2000 and it should be paid by 31st July 2020 midnight.

In case your tax bill for 2019-20 tax year is more than £4000 (total of 2 payment), make a balancing payment by 31st January 2021.

What “Payments on Account” does not include?

“Payments on account” doesn’t include –

Anything you owe for capital gains (if you are self-employed)
Anything you owe for student loans (if you are self-employed)

You need to pay all this in your balancing payment.

Reduce your Payments on Account

If you have already done advance payment towards your tax bill for the coming year and know that your tax bill is going to be lower than the last year, you can reduce it by asking HMRC to reduce your payment on accounts. This can be done either online or by post.