This Content Was Last Updated on November 5, 2015 by Jessica Garbett
First, any 2007/08 tax (but not 2008/09 payments on account) unpaid by 28 February 2009 attracts a 5% surcharge as well as interest (interest also applies to 2008/0 payments on account). This is quite an expensive penalty for being a month late in paying, so make every effort to settle 2007/08 before then.
Secondly, your January 2009 tax payment will include, if you are due to pay it, a 2008/09 payment on account. A second 2008/09 payment on account, if due, will be due in July. The tax system automatically calculates payments on account at 50% of the previous years, in this case 2007/08, tax bill. Payments on account are not collected if your tax bill was less than £1,000 or most of it was paid at source. If you think the payments on account are too high, either (i) because your 2008/09 income will be lower than 2007/08 or (ii) you’ll be paying more tax at source, then theres a straight forward process to register a reduced payment on account with HMRC. Contact us for assistance.