SATR – Payment of Liabilities

Introduction 

• The Approach to this and all Articles is consistent with our Standard System and Procedure.
• If you have a tax liability, you must make a payment to HMRC to avoid any penalties and interest.
• The balancing payment and first instalment must reach HMRC on or before 31 January each year following the end of the previous tax year.
• Where your last Self-Assessment tax bill was more than £1,000, second instalment is also due by 31 July following the end of the previous tax year

Payment on Account

• HMRC Example:
  • Your bill for the 2016 to 2017 tax year is £3,000. You made 2 payments on account last year of £900 each (£1,800 in total).
  • The total tax to pay by midnight on 31 January 2018 is £2,700. This includes:
  • your ‘balancing payment’ of £1,200 for the 2016 to 2017 tax year (£3,000 minus £1,800)
  • the first payment on account of £1,500 (half your 2016 to 2017 tax bill) towards your 2017 to 2018 tax bill
  • You have to pay your second payment on account of £1,500 by midnight on 31 July 2018.
  • If your tax bill for the 2017 to 2018 tax year is more than £3,000 (the total of your 2 payments on account), you’ll need to make a ‘balancing payment’ by 31 January 2019.
• If your tax estimate for the new tax year is lower than the previous year then you can reduce your payments on account when you complete your tax return.
• If you are to reduce your payments on account and it turns out that you did indeed have the tax to pay then HMRC would re-instate them when you filed your tax return and charge interest on the basis of late payments of tax.

How to Pay

• You can make a transfer from your bank account by Faster Payments, CHAPS or Bacs.
• Your bill will tell you which account to pay in to. If you do not have a bill, or you’re not sure, use HMRC Cumbernauld.
• You will need to use your 11-character payment reference when you pay. This is your 10-digit Unique Taxpayer Reference (UTR) followed by the letter ‘K’. This can be found in the attached PDF showing your SATR Computation.
• Account details to use

• Note that it can take up to 3 working days to reach HMRC if paying by BACS. All payments must reach HMRC on or before the payment deadline.