Reducing the Income Tax you have to pay on 31 July

If you're in the Self Assessment tax system, then you usually pay tax on two key dates: the 31st of January and the 31st of July each year.

The next HM Revenue & Customs payment deadline is approaching, for the second payment on account for the year-ended 5 April 2013, which is due by 31st July 2013.

As payments on account are estimated based on the previous years figures, it is possible to apply to have these reduced should the tax liability have fallen.

However, in order to do this accurately you have to know what the actual liability is.

There is still time to prepare the return and accounts before the deadline for making your payment on account, and if profits have reduced then a reduction in the payment on account could bring welcome relief.

Even if the payment cannot be reduced, it does not increase – so the advantage is that people know their tax liabilities well in advance and can plan for them without worrying about an unexpected tax bill.

If you know anyone who has a payment on account due this July, but thinks it may be too high, please do put them in touch Accountancy Edge.