Under self assessment rules HMRC require a payment on account towards your tax bill in January and July each year. But what if your earnings have taken a dip or gone into full time employment? Well, you can apply to HMRC to reduce your payments on account.
How Can I Reduce My Payments On Account?
There are two ways you can apply to reduce your payment on account:
1 By Logging into Your Online Account
Log into your self assessment online account and click on ‘Reduce Payments on Account’
2 By Submitting a SA303 by Post
Alternatively you can submit a form called an SA303 to reduce your payments on account by post. You can complete the SA303 online here and then print it off to send it to HMRC. You will need your UTR number (Unique Tax Payers Reference), National Insurance number or employers reference to complete the form.
Note: you can face penalties and interest if you opt to reduce your payments on account too much, so be careful when applying.
Find out more about Payments on Account here.