How to avoid overpaying self assessment tax

21st June 2021 by Liz Densley

How to avoid overpaying self assessment tax

People who have been self-employed for some time will know that tax payments on account are made in January and July each year. The second payment on account for 1020-21 will be due by 31st July 2021.

If your self-employed income and other untaxed income in 20-21 was greater than in 2019-20, then it is likely that the amount requested for this July is correct. Payments on account are always based on the previous year’s liability unless you are able to apply to reduce them. (They are never increased if income increases – you’ll just pay a balance at the end of the year if that is the case).

However, if 20-21 untaxed income was less than the year before, you may not need to pay as much as you go along.

Reducing payments on accounts in July 2021

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