The end of July sees the second HMRC payment on account becoming due for the year ended on 5th April.
However if you have not completed your tax return yet then this amount will just be an estimate based on the tax for last year.
In order for the 31st July payment on account to be finalised then the 2015 tax return will need to be prepared – covering the year to 5th April.
Once the return has been completed then as well as the 31st July payment being finalised, you will also know your tax liabilities for 31st January and 31st July next year – well in advance of the due dates.
Should your income have reduced in the year just ended 5th April then the 31st July payment can also be reduced or maybe even cancelled. And it may be that the 31st January payment on account could also be refunded in part or full depending on your circumstances.
It is therefore to your advantage to prepare the tax return this month so that the estimated position can be agreed before the next payment on account becomes due at the end of the month.
