So you’ve completed and filed your self assessment tax return with HMRC but now you’re wondering how to actually pay the resulting tax liability. After all HMRC are infamous for their late payment penalties and interest charges so it’s best to make sure no deadlines are missed.
In this article we will cover everything you need to know about how and when to pay HMRC self assessment tax liabilities.
When Should I Pay HMRC?
The deadline to pay HMRC self assessment tax liabilities will usually be the 31 January following the end of the tax year in question.
This means that for a tax liability that arises in the 21/22 tax year, you will need to pay HMRC by the 31 January 2023. A payment will be considered paid providing it is received by HMRC by midnight on the 31 January.
Where you have made a payment but it has not cleared HMRC’s account this will not usually be considered as “on time”.
This deadline will usually apply irrelevant of whether the return was submitted online or by post despite these two submission methods having different filing deadlines.
Payments can usually be made as soon as you have completed and submitted your self assessment tax return and should show as paid on your online account within 3-6 working days.
If you pay via post then you can also include a letter with your payment to ask that a receipt is returned to you which will confirm payment was received and on which date.
There is also an option to have some smaller tax liabilities (less than £3,000) collected through your tax code if you already pay tax through PAYE i.e. you are employed or receive pension income.
Of course in this situation there is no payment deadline as the cost is spread across the tax year but to qualify online self assessments need to have been submitted by 30 December.
Payments On Account
- The self assessment tax bill was less than £1,000, or
- More than 80% of the tax owed has already been paid for example through your tax code or because your bank has already deducted interest on your savings
What Happens If I Don’t Pay HMRC Self Assessment Tax Bill?
If you miss the payment deadline and don’t pay HMRC by either the 31 January or 31 July deadlines then HMRC may apply penalties and charge interest on the unpaid amount.
The amount of penalty that you pay will depend on the size of the liability and how long it remains unpaid. You will find a handy calculator on the gov.uk website that will estimate late payment fees.
Just note that your penalty can be as much as 100% of your tax bill if you deliberately don’t pay it but if you are struggling to make payment then you should contact HMRC immediately as they can often assist with addition flexibility to pay HMRC self assessment liabilitie
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How To Pay HMRC Self Assessment Liability
You can pay HMRC self assessment liabilities is a number of different ways but it’s important to remember that the payment will need to have cleared HMRC’s account by midnight on the deadline day so you should choose a payment method that suits your time constraints.
Payment methods include:
- Through your online bank account
- Online of telephone banking (Faster payments)
- CHAPS
- By debit or corporate credit card online
- At your bank or building society
- Bacs
- Direct Debit
- By cheque through the post
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Adam Hill
Practice based accountant with over 10 years experience, specialising in SME's, Freelancers and Personal Tax. "I take pride in proactively recognising tax planning opportunities on behalf of clients to help them operate more efficiently."
