logo
#

Latest news with #PAYE

Tax self assessment: make payment on account before deadline
Tax self assessment: make payment on account before deadline

Scotsman

timea day ago

  • Business
  • Scotsman

Tax self assessment: make payment on account before deadline

Paying early can ease your cash flow, cut January stress, and help you avoid HMRC charges 💡 Sign up to the weekly Cost Of Living newsletter. Saving tips, deals and money hacks. Sign up Thank you for signing up! Did you know with a Digital Subscription to Edinburgh News, you can get unlimited access to the website including our premium content, as well as benefiting from fewer ads, loyalty rewards and much more. Learn More Sorry, there seem to be some issues. Please try again later. Submitting... The second payment on account deadline for Self Assessment is July 31 It's an advance payment towards your next tax bill, helping to spread the cost Making the payment on time can ease cash flow and reduce January stress Late payments may incur interest and penalties from HMRC You can request to reduce your payment if you expect lower income this year If you're self-employed or file a Self Assessment tax return, you may be familiar with the term 'payment on account'. With the second instalment deadline falling this week (Thursday, July 31), it's important to understand how this system works — and how making your payment on time could benefit your financial planning and reduce stress when your tax bill is due in full. Advertisement Hide Ad Advertisement Hide Ad A payment on account is an advance payment towards your next Self Assessment tax bill. It's designed to help spread the cost of your tax over the year rather than paying a lump sum in January. (Photo: Pexels) | Pexels You make two payments on account every year: the first by January 31, and the second by July 31. Each payment is usually equal to 50% of your previous year's tax bill (excluding student loan repayments and Capital Gains Tax). For example, if your last tax bill was £4,000, you'll likely be asked to make two £2,000 payments on account for the current tax year. HMRC automatically sets up payments on account if your tax bill is more than £1,000 and less than 80% of your tax was collected at source (e.g. through PAYE). Advertisement Hide Ad Advertisement Hide Ad This often applies to freelancers, sole traders, and other self-employed individuals whose tax isn't deducted automatically from their income. If your earnings remain relatively stable, these advance payments can be helpful. But if your income drops from one year to the next, your payments may end up being too high — though you can request to reduce them in that case (more on that later). The benefits of making a payment on account While it may feel counterintuitive to pay tax before you've received the income, there are several benefits to staying on top of your 31 July deadline: Advertisement Hide Ad Advertisement Hide Ad Avoid a big January bill: January can be a tough month financially, especially after the Christmas period. Making your second payment on account in July spreads the tax burden across the year, helping you avoid one large, potentially overwhelming bill at the start of the year. Stay on HMRC's good side: Missing the 31 July payment deadline could lead to interest charges and penalties. Making the payment on time helps you avoid unnecessary costs and keeps your tax affairs in good order. Better cash flow management: If you build your payment on account into your budget throughout the year, it becomes a manageable part of your finances. It also helps you avoid relying on loans or credit cards to pay your tax bill in January. Reduces the impact of the final balancing payment: In January, you may owe a balancing payment — the difference between your total tax bill and what you've already paid on account. If you've made both payments on time and your income hasn't increased significantly, this final amount may be small or even nil. Advertisement Hide Ad Advertisement Hide Ad Protects you against HMRC penalties and interest: HMRC charges interest on late payments and may issue penalties for overdue tax. Making the July payment helps ensure you're not hit with unexpected charges down the line. How to make a payment on account Paying HMRC is relatively straightforward. You can make your July 31 payment in several ways: Online banking or mobile app: Use HMRC's bank details and your 11-character payment reference (your Unique Taxpayer Reference followed by 'K'). Use HMRC's bank details and your 11-character payment reference (your Unique Taxpayer Reference followed by 'K'). Debit or corporate credit card: You can pay online via HMRC's payment portal, although credit cards may incur a fee. You can pay online via HMRC's payment portal, although credit cards may incur a fee. Direct Debit: If you've set up a Direct Debit previously, HMRC may collect the payment automatically. If not, you can set it up in your HMRC online account. If you've set up a Direct Debit previously, HMRC may collect the payment automatically. If not, you can set it up in your HMRC online account. Bank Transfer (Faster Payments, BACS, CHAPS): Use your banking app or service to transfer funds directly to HMRC. Use your banking app or service to transfer funds directly to HMRC. At your bank or building society: You'll need a payslip from HMRC to pay this way — and this option is only available if you still receive paper statements. Always check your HMRC online account to confirm the exact amount due and your payment reference. What if you expect your income to be lower? If you believe your income will be significantly lower in the current tax year, you can apply to reduce your payments on account. This can be done online via your Self Assessment account or by submitting form SA303. Advertisement Hide Ad Advertisement Hide Ad But be cautious: if you reduce the payments too much and end up owing more, HMRC may charge you interest on the underpaid amount. Are you struggling to make ends meet as costs continue to rise? You can now send your stories to us online via YourWorld at It's free to use and, once checked, your story will appear on our website and, space allowing, in our newspapers.

Tax self assessment: make payment on account before deadline
Tax self assessment: make payment on account before deadline

Scotsman

timea day ago

  • Business
  • Scotsman

Tax self assessment: make payment on account before deadline

Paying early can ease your cash flow, cut January stress, and help you avoid HMRC charges 💡 Sign up to the weekly Cost Of Living newsletter. Saving tips, deals and money hacks. Sign up Thank you for signing up! Did you know with a Digital Subscription to The Scotsman, you can get unlimited access to the website including our premium content, as well as benefiting from fewer ads, loyalty rewards and much more. Learn More Sorry, there seem to be some issues. Please try again later. Submitting... The second payment on account deadline for Self Assessment is July 31 It's an advance payment towards your next tax bill, helping to spread the cost Making the payment on time can ease cash flow and reduce January stress Late payments may incur interest and penalties from HMRC You can request to reduce your payment if you expect lower income this year If you're self-employed or file a Self Assessment tax return, you may be familiar with the term 'payment on account'. With the second instalment deadline falling this week (Thursday, July 31), it's important to understand how this system works — and how making your payment on time could benefit your financial planning and reduce stress when your tax bill is due in full. Advertisement Hide Ad Advertisement Hide Ad A payment on account is an advance payment towards your next Self Assessment tax bill. It's designed to help spread the cost of your tax over the year rather than paying a lump sum in January. (Photo: Pexels) | Pexels You make two payments on account every year: the first by January 31, and the second by July 31. Each payment is usually equal to 50% of your previous year's tax bill (excluding student loan repayments and Capital Gains Tax). For example, if your last tax bill was £4,000, you'll likely be asked to make two £2,000 payments on account for the current tax year. HMRC automatically sets up payments on account if your tax bill is more than £1,000 and less than 80% of your tax was collected at source (e.g. through PAYE). Advertisement Hide Ad Advertisement Hide Ad This often applies to freelancers, sole traders, and other self-employed individuals whose tax isn't deducted automatically from their income. If your earnings remain relatively stable, these advance payments can be helpful. But if your income drops from one year to the next, your payments may end up being too high — though you can request to reduce them in that case (more on that later). The benefits of making a payment on account While it may feel counterintuitive to pay tax before you've received the income, there are several benefits to staying on top of your 31 July deadline: Advertisement Hide Ad Advertisement Hide Ad Avoid a big January bill: January can be a tough month financially, especially after the Christmas period. Making your second payment on account in July spreads the tax burden across the year, helping you avoid one large, potentially overwhelming bill at the start of the year. Stay on HMRC's good side: Missing the 31 July payment deadline could lead to interest charges and penalties. Making the payment on time helps you avoid unnecessary costs and keeps your tax affairs in good order. Better cash flow management: If you build your payment on account into your budget throughout the year, it becomes a manageable part of your finances. It also helps you avoid relying on loans or credit cards to pay your tax bill in January. Reduces the impact of the final balancing payment: In January, you may owe a balancing payment — the difference between your total tax bill and what you've already paid on account. If you've made both payments on time and your income hasn't increased significantly, this final amount may be small or even nil. Advertisement Hide Ad Advertisement Hide Ad Protects you against HMRC penalties and interest: HMRC charges interest on late payments and may issue penalties for overdue tax. Making the July payment helps ensure you're not hit with unexpected charges down the line. How to make a payment on account Paying HMRC is relatively straightforward. You can make your July 31 payment in several ways: Online banking or mobile app: Use HMRC's bank details and your 11-character payment reference (your Unique Taxpayer Reference followed by 'K'). Use HMRC's bank details and your 11-character payment reference (your Unique Taxpayer Reference followed by 'K'). Debit or corporate credit card: You can pay online via HMRC's payment portal, although credit cards may incur a fee. You can pay online via HMRC's payment portal, although credit cards may incur a fee. Direct Debit: If you've set up a Direct Debit previously, HMRC may collect the payment automatically. If not, you can set it up in your HMRC online account. If you've set up a Direct Debit previously, HMRC may collect the payment automatically. If not, you can set it up in your HMRC online account. Bank Transfer (Faster Payments, BACS, CHAPS): Use your banking app or service to transfer funds directly to HMRC. Use your banking app or service to transfer funds directly to HMRC. At your bank or building society: You'll need a payslip from HMRC to pay this way — and this option is only available if you still receive paper statements. Always check your HMRC online account to confirm the exact amount due and your payment reference. What if you expect your income to be lower? If you believe your income will be significantly lower in the current tax year, you can apply to reduce your payments on account. This can be done online via your Self Assessment account or by submitting form SA303. Advertisement Hide Ad Advertisement Hide Ad But be cautious: if you reduce the payments too much and end up owing more, HMRC may charge you interest on the underpaid amount.

Are YOU owed money? 1million UK workers can still claim refunds worth £1,000s
Are YOU owed money? 1million UK workers can still claim refunds worth £1,000s

Scottish Sun

time5 days ago

  • Business
  • Scottish Sun

Are YOU owed money? 1million UK workers can still claim refunds worth £1,000s

Plus, we share how you can check to see if you are owed money back TAXING TIMES Are YOU owed money? 1million UK workers can still claim refunds worth £1,000s Click to share on X/Twitter (Opens in new window) Click to share on Facebook (Opens in new window) NEARLY one million UK workers are missing out on refunds worth £1,000's. You could be owed money from the taxman if you overpaid on income tax or other forms of taxes. Sign up for Scottish Sun newsletter Sign up 1 You can claim money you are owed if you over paid on income tax Credit: Getty - Contributor There are many reasons why you may have overpaid on your tax, such as being put on the wrong tax code when you started a new job or starting to receive a pension at work. Under current time limits, you can reclaim money back for any tax you over paid going back four years. HMRC has issued a call out on social media encouraging working Brits to check if they are missing out on a backdated payment. A statement on X read: "Don't miss out on your tax refund! Almost 1 million people haven't claimed the money they're owed." Typically at the end of each tax year, which runs from 6 April to 5 April the following year, HMRC works out whether you paid the right amount of tax. The taxman usually issues rebates automatically, but if you think you have been overcharged you can put in a claim yourself. There are steps you can take if you think you have overpaid. You can check what income tax you paid for the last year by visiting the website and logging in with your Government Gateway ID. You can then use the government's income tax estimation tool to see how much income tax you should have paid for a previous tax year. This tool can be found here, How to Qualify for Free or Discounted Council Tax! When you know how much tax you paid you can then work out if you are owed a refund. You can also check and claim a refund via the HMRC app, which is free to download. The tool also lets you file a Self Assessment tax return if you are self employed. HMRC issues letters to four million It comes as HMRC said that it is sending out around four million P800 letters to inform people that they are owed an income tax refund. Workers who pay PAYE tax and pensioners who may have overpaid their tax on pension income are among those who could receive the letters. If you receive a letter it will include a link to the Government's website where you can complete an online form to nominate the bank account you want your rebate paid into. It should then be around five working days until you receive your payment. In some cases if you don't complete the form HMRC will send a cheque, your letter will state if this is the case. If you've received a letter but don't have access to a computer or phone with internet, you can contact HMRC via phone or post. USING HMRC APP The HMRC allows users to get information about tax, National Insurance and benefits. You can use it to check your: tax code National Insurance number income and benefits employment and income history from the previous 5 years Unique Taxpayer Reference (UTR) for Self Assessment Self Assessment tax and how much you owe Child Benefit State Pension forecast gaps in National Insurance contributions You can also use it to: get an estimate of the tax you need to pay make a Self Assessment payment make a Simple Assessment payment set a reminder to make a Self Assessment payment access your Help to Save account use our tax calculator to work out your take home pay after Income Tax and National Insurance deductions track forms and letters you have sent to us claim a refund if you have paid too much tax ask HMRC's digital assistant for help and information update your name update your address save your National Insurance number to your digital wallet check for gaps in your National Insurance contributions and the benefits of paying them check if you can make a payment for gaps in your National Insurance contributions choose to be contacted by HMRC electronically, instead of by letter How to access the app Open the app and enter your Government Gateway user ID and password to sign in for the first time. If you do not have a user ID, you can create one via the app.

UK sees 40% surge in tax contributions from wealthy amid rising high-net-worth exodus
UK sees 40% surge in tax contributions from wealthy amid rising high-net-worth exodus

Arabian Business

time5 days ago

  • Business
  • Arabian Business

UK sees 40% surge in tax contributions from wealthy amid rising high-net-worth exodus

Wealthy individuals in the UK have seen their tax burden increase by nearly 40 per cent over the past four years, according to new analysis from investment migration advisory firm Astons. The findings come amid a growing trend of high-net-worth individuals (HNWIs) exiting the country, spurred by tighter non-domicile tax rules and increasingly unfavourable fiscal policy. In its latest analysis of HMRC tax receipt data, Astons reports that wealthy UK residents — defined by HMRC as individuals earning over GBP 200,000 annually or holding assets exceeding GBP 2 million — paid GBP 190 billion in tax during the 2023–24 fiscal year. That figure marks a 3.7 per cent rise from the previous year and a 39.8 per cent increase since 2019–20. Of that total, GBP 69.9 billion was paid through PAYE income tax and GBP 32.9 billion via self-assessment, both categories reflecting a more than 61 per cent increase over the four-year period. Capital gains tax receipts reached GBP 9.5 billion, with inheritance and stamp duties contributing GBP 3.8 billion and GBP 2.9 billion, respectively. The data further shows that wealthy individuals accounted for 88 per cent of all self-assessment income tax receipts collected by HMRC during the period, underlining the significant role HNWIs play in the UK's business and entrepreneurial ecosystem. Astons notes that the increase in tax receipts coincides with sweeping reforms to the UK's non-domicile (non-dom) tax regime, which took effect in April 2025. Under the new rules, aimed at enhancing fairness and transparency, it is estimated that 10 per cent of non-doms have already left the UK as of June, despite a four-year transition period granted to new residents. 'This huge increase in tax being taken from the UK's wealthy population over the past few years goes a long way towards explaining why so many are choosing to leave,' said Alena Lesina, Citizenship and Residency Consultant at Astons. 'There are countries around the world that take a far more supportive and encouraging stance towards wealth creation, recognising the value that high-net-worth individuals bring through job creation, business investment, and wider economic contribution.' Lesina cited Greece's Golden Visa as a standout alternative for wealthy individuals seeking more favourable tax treatment. The programme, which starts at a EUR 250,000 investment threshold, offers residency rights and includes a non-dom regime under which eligible participants can pay a flat annual tax of EUR 100,000 on global income, instead of standard progressive rates that can reach 45 per cent. 'Greek residency also comes with the added benefit of unrestricted travel across the Schengen Zone – a right UK nationals lost post-Brexit,' Lesina said. 'And uniquely, Greece does not require investors to live permanently in the country to maintain their Golden Visa status.'

What's happening with forgiveness for student loans on income-based repayment plans?
What's happening with forgiveness for student loans on income-based repayment plans?

Los Angeles Times

time5 days ago

  • Business
  • Los Angeles Times

What's happening with forgiveness for student loans on income-based repayment plans?

Amid a federal overhaul of student loan plans, many borrowers have been left wondering what it means for their hopes of loan forgiveness. In particular, those who are enrolled in a repayment plan known as income-based repayment, or IBR, have wondered if forgiveness will still be available to them. A recent update from the Education Department said forgiveness through the IBR plan is paused while systems are updated. 'IBR forgiveness will resume once those updates are completed,' the agency said. IBR is not affected by a federal court's injunction blocking former President Joe Biden's Saving on a Valuable Education, or SAVE, plan. The IBR plan was created by Congress separately from other existing repayment plans, including those known as PAYE and ICR. It's also exempt from some changes coming from President Donald Trump's tax and spending bill. Here's what to know. Following a court injunction last summer, loan forgiveness for the SAVE, Income-Contingent Repayment, or ICR, and Pay As You Earn, or PAYE, plans is currently paused because those plans were not created by Congress. The legal action called into question whether student loan forgiveness was authorized under the federal statute that governs those plans. The IBR plan was created under a different authority. IBR, created by Congress, reduces monthly payments for borrowers with lower incomes. It also invokes a statute that authorizes student loan forgiveness of the balance at the end of a 20- or 25-year repayment term. The Education Department hasn't given a timeline for when its system update will be complete and forgiveness will resume. Borrowers enrolled in IBR who have reached the threshold for forgiveness but who are not seeing their loans discharged as a result of the pause may continue to make payments with the expectation that the Education Department will refund the excess payments. The plan offers forgiveness after 240 or 300 monthly payments, depending on when borrowers enrolled. Borrowers can also request forbearance from their loan servicer. In that case, interest would continue to accrue on any remaining balance. Trump's tax and spending law will eventually phase out the ICR, PAYE and SAVE plans, replacing them with the Repayment Assistance Plan. IBR plans will continue to exist and to provide forgiveness after 20 or 25 years. RAP, in contrast, will require 30 years of repayment before forgiveness is granted. Lewis writes for the Associated Press.

DOWNLOAD THE APP

Get Started Now: Download the App

Ready to dive into a world of global content with local flavor? Download Daily8 app today from your preferred app store and start exploring.
app-storeplay-store