Payments on account 01 - Claim to reduce payments on account
You may want to reduce your payments on account, including reducing to nil, if you expect:
- your 2021 to 2022 income to be lower than 2020 to 2021
- your allowances or reliefs to be higher
or more of your income will be taxed at source, because:
- it will be taxed under PAYE
- it will be covered by subcontractor deductions
- you will have more savings income
Choose 'Yes' if you're claiming to reduce your Payment on Account otherwise, select 'No'.
If you want to reduce your payments on account, you must make a reasonable estimate of the difference between the Income Tax you expect to pay in 2021 to 2022 and your Income Tax on this return. You can reduce each of your payments by half of this difference. If you decide later that your reduced payments are still too high you can make a claim to reduce your payments on account online or you can write to HMRC saying why you're claiming to reduce again. Make sure the payments you make, by 31 January 2022 and 31 July 2022, will add up to your best estimate of your tax bill for 2021 to 2022.
If your 2 payments on account turn out to be different from your 2021 to 2022 tax bill HMRC will:
- credit you with interest if you've paid more than you needed to
- charge interest if you've paid less than you needed to
Your 2 payments on account should be the smaller of the actual tax, Student Loan repayments and Class 4 NICs due, net of tax deducted at source and tax credits on dividends, for 2020 to 2021 or 2021 to 2022. If you've been careless or fraudulent in claiming to reduce your payments on account, HMRC may charge a penalty. If you decide later that you've reduced too much, you can revise your claim upwards and/or pay more in line with your revised estimate. But if you do not make a claim, HMRC may allocate additional amounts paid to other outstanding liabilities.
