As a responsible taxpayer it’s essential to understand the process of paying your self assessment tax bill.
After filing your 22/23 tax return if you owe tax you will receive a bill from HMRC confirming the amount of income tax you owe.
Submitting your tax return on time is essential and equally important is paying the tax you owe to HMRC within the SA payment timescales.
When do need to pay 22/23 self assessment tax?
To avoid penalties and interest charges it’s crucial to meet the payment deadlines for your 2022/2023 self assessment tax bill.
There are two main self assessment payment deadlines to keep in mind:
31st January 2024: This is the deadline for paying any tax owed for the 22/23 tax year, known as a balancing payment. It is also the due date for your first payment on account for the next tax year if applicable.
31st July 2024: This is the deadline for your second payment on account which is an HMRC estimation based on your previous tax years income. A second payment on account is usually only requested when your previous years tax bill was worth £1000 or more.
It is important to note that your payment must reach HMRC by the deadline date. Failure to do so will usually result in automatic penalties and additional interest charges.
How to pay your 2022/2023 self assessment tax bill
HMRC offers several payment methods for settling your self assessment tax bill. Here are most of payment options available:
Direct Debit: This convenient method allows you to set up automatic payments directly from your bank account. You can arrange this through your HMRC online account.
Online Banking: Most banks offer online payment services that allow you to transfer funds directly to HMRC. Simply log in to your online banking platform and follow the instructions to make the payment.
Personal Debit Card: You can use your personal debit card to make a payment online through HMRC’s secure payment portal.
Bank Transfer: You have the option to make a bank transfer using CHAPS, Faster Payments, or Bacs. Check with your bank for the specific transfer options available to you.
Cheque: If you prefer traditional methods, you can send a cheque by post. Make sure to allow sufficient time for the payment to reach HMRC before the deadline.
Check that your 22/23 tax payment has been received
The time it takes for your payment to reach HMRC depends on the method you choose.
It is crucial to consider this when planning your payment to ensure it arrives on time.
For example if you pay by online banking the estimated timescale for your tax payment to arrive with HMRC is up to the next working day. Other forms of payment like BACS can potentially take up to three working days.
You can check if HMRC has received your payment by accessing your self assessment online account.
The payment should reflect as “paid” between three and six working days after you sent it. If you choose to pay by post you can include a letter requesting a receipt from HMRC.
During busy periods HMRC’s online payment services may experience delays.
To avoid any issues it is advisable to file your tax return and make your payment well ahead of the deadlines.
Can you pay self assessment tax in instalments?
In certain circumstances it’s possible to pay your self assessment tax bill in instalments.
The method you choose depends on whether you want to make payments against your latest bill or set up a budget payment plan for future bills.
Here are the options available:
HMRC payment plan for 22/23 tax bill: If you owe £30,000 or less, have no other payment plans or debts with HMRC, and your tax returns are up to date you can be eligible to set up a payment plan to spread the cost of your latest tax bill. This option is available if it’s less than 60 days after your SA payment deadline.
HMRC budget payment plan: If you want to allocate funds for your next tax bill you can set up a budget payment plan. This allows you to make weekly or monthly payments towards your future bill.
To set up a plan, log in to your HMRC online account, go to the Direct Debit section, and select the “budget payment” option on the Direct Debit form.
It is important to note that you must be up to date with your previous self assessment payments to qualify for a budget payment plan.
Always remember if the amount in your plan does not cover the full cost of your next bill, you will need to pay the remaining balance by the payment deadline.
A budget payment plan differs from a payment on account which you may still be required to make twice a year.
Paying 22/23 self assessment tax through PAYE
Under certain conditions you can pay your self assessment tax bill through your PAYE tax code.
This let’s you pay the income tax that you owe via self assessment through the tax deducted from your salary or pension.
Here’s what you typically need to meet the requirements:
- You owe less than £3,000 on your tax bill.
- You already pay tax through PAYE such as being an employee or receiving a company pension.
- You submitted your paper tax return by 31st October or your online tax return by 30th December.
Paying the self assessment tax you owe for the 22/23 tax year in this way will mean that your tax code will be adjusted in the 23/24 tax year.
