late payment on account for self assessment

[Gilesyb27]

Hi all, a very obvious question but I'm struggling to get a completely clear answer.....

Self assessment tax returns are filed and paid by Jan 31st each year, the penalties for late filing and payment are clear, BUT

does anyone know for certain how HMRC would deal with a slightly delayed (eg7-10d) payment on account (the 31st of July payment)? are penalties the same as the january ones? I suspect they might be (ie instant fine and interest) but I wondered if there was a difference as it's a guesstimate for this year rather than a late payment for last year (if that makes sense?).

put me out of my misery please

[PinkDalek]

Hi all, a very obvious question but I'm struggling to get a completely clear answer.....

Self assessment tax returns are filed and paid by Jan 31st each year, the penalties for late filing and payment are clear, BUT

does anyone know for certain how HMRC would deal with a slightly delayed (eg7-10d) payment on account (the 31st of July payment)? are penalties the same as the january ones? I suspect they might be (ie instant fine and interest) but I wondered if there was a difference as it's a guesstimate for this year rather than a late payment for last year (if that makes sense?).

put me out of my misery please

I lost a lengthy reply by clicking on one of the links I'd included (and forgot to Save my draft).

Briefly now, I've read If the taxpayer makes a time to pay agreement with HMRC the [late payment] penalty is suspended. and this is explored in more detail at the Low Incomes Tax Reform Group of the Chartered Institute of Taxation :

https://www.litrg.org.uk/tax-guides/tax ... -penalties
https://www.litrg.org.uk/tax-guides/tax ... y-tax-bill

[GPhelan]

There is an article about the mid year payments on the Which? web site. I think this counts as consumer advice and should be readable by everyone.
https://www.which.co.uk/news/2018/07/on ... r-2017-18/

In summary though, there are no penalties - as in fines for missing the 31 July payment date, but HMRC can charge 2.5% interest.

[PinkDalek]

There is an article about the mid year payments on the Which? web site. I think this counts as consumer advice and should be readable by everyone.
https://www.which.co.uk/news/2018/07/on ... r-2017-18/

In summary though, there are no penalties - as in fines for missing the 31 July payment date, but HMRC can charge 2.5% interest.

That's interesting, thanks, and I hope the OP sees your reply.

It includes:

The good news is that they don’t apply to missing the payment on account deadline, but they’ll kick in if you miss the deadline for making the balancing payment on 31 January.

However, I'd far prefer to see this in writing on HMRC's website, as it isn't replicated in the Low Incomes Tax Reform Group of the Chartered Institute of Taxation links I provided earlier.

Unfortunately this https://www.gov.uk/estimate-self-assessment-penalties (which is only up to 6 April 2016 to 5 April 2017) only appears to cater for the total Income Tax liability and not any interim payments on account nor does it shows the workings.

Not sure about their The bad news is you can be charged interest for late payments – at 2.5%. or am I misreading https://www.gov.uk/government/publicati ... rest-rates which suggests that late payment interest has been 3.0% since 21 November 2017.

Read more: https://www.which.co.uk/news/2018/07/on ... r-2017-18/ - Which?

[PinkDalek]

There is an article about the mid year payments on the Which? web site. I think this counts as consumer advice and should be readable by everyone.
https://www.which.co.uk/news/2018/07/on ... r-2017-18/

In summary though, there are no penalties - as in fines for missing the 31 July payment date, but HMRC can charge ...% interest.

That's interesting, thanks, and I hope the OP sees your reply.

It includes:

The good news is that they don’t apply to missing the payment on account deadline, but they’ll kick in if you miss the deadline for making the balancing payment on 31 January.

However, I'd far prefer to see this in writing on HMRC's website, as it isn't replicated in the Low Incomes Tax Reform Group of the Chartered Institute of Taxation links I provided earlier. ...

Replying to self but Automatic interest and late payment penalties: late payment penalties on unpaid Income Tax and Capital Gains Tax for 2010-11 onwards https://www.gov.uk/hmrc-internal-manual ... k/salf308a includes (my bold):

… The first late payment penalty is 5% of any tax unpaid after 30 days ... Where a balancing payment or payment on account is still unpaid more than 30 days from the due date for that year’s balancing payment, a late payment penalty automatically arises equal to 5% of the tax unpaid at that date.

There will always be some taxpayers who intend to pay on time but, for some genuine reason, fail to do so. The 30 day period before a late payment penalty arises ensures that these taxpayers do not incur such a penalty.

There may also be some taxpayers who, having calculated their final liability for a tax year, realise that they will have insufficient funds to pay the balance due at the due date. The 30 day period gives these taxpayers time to contact HMRC to arrange a suitable scheme of payment.


So the OP may be okay, without having to contact HMRC, but the HMRC page linked to above is also not unambiguous where they say:

Where a balancing payment or payment on account is still unpaid more than 30 days from the due date for that year’s balancing payment

As they may well only be saying late payment penalties are potentially chargeable from the January due date, rather than the July the OP is talking about. I've therefore located a recent paper SA300. The reverse talks about late payment penalties and refers to balancing payments (rather than payments on account). However, it concludes with "A balancing payment includes any unpaid payments on account" but that might mean only at the end of January.

Does anyone have chapter and verse on this, as I'm clearly getting myself muddled?

[Gilesyb27]

Thanks for the links guys, very helpful. In a way I’m glad it’s not just my own stupidity making the issue unclear!!

[Gilesyb27]

I would have been lurking on there but have never been prolific enough to have caught your attention!!

Suspect the fact that I had to have a number on my username means the original gilesyb got there first