Learn how to reduce payments on account with our guide.
In the previous article, we learnt what is payment on account. Let’s have a quick recap; You need to make “payment on account” that is “advance tax” in two parts if your last self-assessment tax due is more than £1000
- 1st payment is due on 31st January, with the last tax bill, which will be 50% of current tax bill assuming your next year’s income and tax dues will be the same.
- 2nd payment will be due on 31st July.
Now the frequently asked question comes:
Yes, You can reduce the payment on account if you know that your tax liability will be less than in the previous tax year.
You can make a claim to reduce your “payments on account” by login into your personal tax account using the government gateway you have or by creating one from. Here is step by step guide below:
Time needed: 10 minutes.
A step-by-step guide to reducing payments on account to HMRC
- Log in to your Personal tax account at the Gov. Uk portal.
Search gov. UK personal tax account at google if you are doing it the first time. You will find the first link https://www.gov.uk/personal-tax-account.
Click on start to log in using your gateway credential, if you do not have one then click on create a new account. Once you have created a new account, you will have to first add your self-assessment tax reference (10-digit UTR) number to your account to activate. It will take 10-15 days to process for first-time users. We can share another guide on how to create a self-assessment account online.
After your login is successful, you will land to the account home page below:
- Select – Business tax account
From the first login dashboard, select the option ‘Business Tax Account’. After that you should get your dashboard as below:
- Select option ‘Reduce Payments on Account’
At your self-assessment tax account dashboard, go to view payments and credits and select – Reduce payments on account.
- Enter your estimated correct amount to schedule
Here at this step, you need to enter the reduced amount of payments and provide the appropriate reason, then submit.
- Select to confirm the reduced payments on account amount at the HMRC portal.
At the final screen, give your acknowledgement to submit.
Hope you have liked our how-to guide for reducing payments of advance tax above. In case you need any help from our consultant then contact Accountant for Self-Employed.