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How to Pay your Self-Assessment Tax Bill in 2020


If you have a self-assessment tax bill to pay for the 2018-19 fiscal year, you need to pay HMRC by 31 January
2020. Accountants Conwy can help you get through submitting your tax return by the official self-assessment
deadline of 31 January. Here are the ways in which you can pay your tax bill, including PAYE, and payment on
account. There are also some considerations to be made if you expect to be late paying your bill. 


How Can I Pay My Self-Assessment Tax Bill?
Many people are of the belief that self-assessment tax is only associated with those who are self-employed,
but in actual fact, there are many people who must submit a tax return each year. 


They include those who earn more than £100,000 as an employee or a pensioner, anyone who owes capital
gains tax from selling assets, those who receive taxable income from abroad and anyone who’s earned £2,500
or more in untaxed income.


Depending on your circumstances, this may be due in a lump sum on 31 January, or your payments might be
broken up through the year.

Pay Tax Each Month via PAYE
PAYE, ‘pay as you earn’ refers to income tax that is deducted from your weekly/monthly salary and pension
income before you receive it. But if you have additional tax to pay via self-assessment, you might be able to
add it to your PAYE payments. 


What you pay is calculated depending on what you earn and whether you’re eligible for the personal allowance
(this was £11,850 in 2018-19, and rose to £12,500 in 2019-20).


However, you can only pay self-assessment tax through PAYE in quite specific circumstances:

Your self-assessment tax bill must be less than £3,000

You must already be paying tax through PAYE, for example, if you’re an employee or you get a company pension

You must have submitted your paper tax return by 31 October, or complete your online tax return by midnight 30
December. 

All of these must apply. If they do, HMRC will normally collect what you owe through PAYE automatically. So if
you don’t want to pay your tax in this way you’ll have to request for them not to on your tax return.


Pay a Lump Sum by 31 January
There are a lot of different options for paying your tax bill, but some take longer than others. HMRC must have
received the money by midnight on 31 January, you will need to factor in this transaction time when choosing
your preferred payment method.


Same or next day:
  • Online or telephone banking
  • Chaps
  • Debit card online
  • At your bank or building society


Three working days:
  • Bacs
  • Direct debit (if you’ve already set one up with HMRC)
  • Cheque through the post


Five working days:
  • Direct debit (if you haven’t set one up with HMRC before)


It should be noted that you can no longer pay HMRC via credit card or at the Post Office. 

Payment on Account
If you are self-employed, you might have to pay your self-assessment tax bill in two advance chunks, this is
known as ‘payment on account’. These payments are due on 31 January and 31 July - what you pay is an
estimate based on the tax you paid in the previous fiscal year. 


Once you have submitted your tax return it may turn out that you have paid too much or too little tax, you’ll
either get a tax refund or you’ll have to make an additional ‘balancing payment’, which will be due on 31 January
the following year.


This can be a bit tricky to budget for the first time you start paying tax in this manner, as not only will you have
to pay the previous year’s tax by 31 January, but you’ll also have to pay half of your estimated tax for the
following year on the same date. 

What if You’re Late Paying Your Tax Bill?
If you miss the official 31 January payment deadline, you will be charged interest from that date. The current
interest rate is 3.25%. If your payment is more than 30 days late, you could face additional penalties:

  • After 30 days: a charge equal to 5% of the tax outstanding
  • After six months (31 July): a further 5%
  • After 12 months (31 January the following year): an additional 5%

If you’re also late in the submission of your tax return, there could also be additional charges to pay. 

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