How to pay your self-assessment tax bill

  • by Carole Jordan
  • 03 Jan, 2018
how to pay your self-assessment tax bill businessheads accountants and consultants brighton

It’s January and its ‘National Pay Your Self-Assessment Tax Month’!
Your tax return should be safely in the HMRC net now but if you didn’t file before 12th December you will not receive a statement and payslip in the post. In any case, it’s best to brace yourself for making the payment as the statements are drip feeding very slowly through the postal system as I write.

Tax payments this January can be higher for Limited Company owners due to the 7.5% increase in dividend tax which came into effect from 5th April 2016 and is now payable.

Read below to avoid getting into a techno-tangle when you make your tax payment.

Firstly, when should you pay your self-assessment tax bill?

All self-assessment tax returns, and outstanding tax due, will need to be submitted and paid by January 31st. If you miss this deadline you will incur penalty fees starting at £100 if your tax return is late by up to 3 months. If you miss the payment deadline then interest will be charged on the balance left unpaid by the end of January, and an additional 5% penalty will be applied to any outstanding balance at the end of February and July.

If the tax payment due is over £1,000 then you may also need to make a payment on account. This means a payment in advance of you completing next year’s tax return, based on the fact you owe so much tax in this tax year. Payments on account are due by January and July 31st so January can be doubly painful! BusinessHeads clients can check the cover letter sent with their final tax return which shows exactly how much is due by the end of January.

Plan to make your payment at the latest, 5 days before the 31st January deadline . That will ensure you will hit the deadline even if the payment is delayed in the system.

How to pay your self-assessment tax bill by January 31st?

If you aren’t eligible to pay through your tax code throughout the year , then you may be wondering what’s the best way for you to pay your tax bill? Well you have several options available to you, it really depends on your preference and the time you have left to pay.

For instant or next day payments

  • Online or via telephone banking
  • CHAPS
  • Debit or credit card* online (rules for credit cards are changing, read below for more info)
  • At your bank or building society (you will need a paying-in slip from HMRC)

Within 3 working days

  • BACS
  • Direct Debit (if you’ve set one up with HMRC before)
  • By cheque in the post

5 working days

  • Direct Debit (if you haven’t set one up with HMRC before)

Use your 10 digit Unique Taxpayer Reference (UTR) followed by the letter K as your payment reference. Remember, you can’t pay at your local post office any longer, so you must use one of the above options. Also, expect delays if you’re trying to pay at a peak time, it’s always best to get the payment out the way early, instead of leaving it until the deadline.

*Please also be aware that from January 13th 2018 you will no longer be able to pay your tax bill using your credit card. This is due to the new legislation meaning that HMRC will no longer be able to pass on the bank charges associated with processing credit card payments. Because of this they have made the decision to remove this payment option.

Our favourite payment methods

We recommend our clients use either the Online Banking method or, if you prefer to use a card, choose the Debit or Credit Card online payment option. These are the least hassle and leave you in control of your payment date. But remember, credit cards will no longer be accepted from January 13th!

What are the bank details for HMRC tax payments?

Unless otherwise specified on your letters from HMRC you should send your tax payments and payments on account to the HMRC Cumbernauld bank details.

UK details you should send the payment to: 

Sort code          Account number            Account name
08 32 10               12001039                             HMRC Cumbernauld

08 32 10               12001020                             HMRC Shipley 

& if your account is overseas you should send it to:

Bank identifier code (BIC)           Account number (IBAN)                                   Account name
BARCGB22                                          GB62BARC20114770297690      HMRC Cumbernauld

BARCGB22                                          GB03BARC20114783977692      HMRC Shipley

Once you’ve sent your payment make sure you check the payment has been received! This can take 3-6 working days to be processed and will appear on your online HMRC account once it’s been verified.

If you need any help with any of the above then you can call HMRC on: 0300 200 3310

But remember, if we’re authorised to act as your agent and you have any problems this tax season then you can give us a call on: 01273 882200. HMRC may be swamped with calls and we may be able to answer your questions, or alternatively contact HMRC on your behalf.

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