On 31 July 2024, second payments on account of 2023-24 Income Tax and Class 4 National Insurance liabilities fall due. This year, there’s potentially more to consider than usual.

Payments On Account (POAs)

POAs for 2023-24 are due for individuals within self-assessment unless:

  • Income Tax and Class 4 National Insurance Contributions (NICs) due under self-assessment for 2022-23 was less than £1,000.
  • More than 80% of the Income Tax and NI owed for 2022-23 was deducted at source. 

The Payment dates for 2023-24 POAs are 31 January and 31 July 2024.

Reducing POAs

POAs are based on the previous year's tax liability. Where an individual’s 2023-24 Income Tax and NI liabilities are expected to be less than 2022-23, they can make a claim to reduce their 2023-24 POAs.

This reduction can made by filing the 2023-24 tax return by 31 July 2024, or by a separate application to HMRC by post or online.

Key points to remember this year

  • It is important to pay on time: Interest is charged on late payments at 7.75%.
    • This is the highest rate for nearly 17 years.
  • Where a claim to reduce POAs is fraudulent or negligent, HMRC can Charge a penalty.
    • The maximum penalty is the difference between the payment that should have been made and the amount paid.
  • When estimating 2023-24 tax liabilities, do not forget to factor in the effect of Basis period reform.
    • This may result in more income being taxable in 2023-24 than would otherwise have been the case. 

Useful guides on this topic

Basis Period reform
What is basis period reform? Who is affected? What is the new basis year for tax? What are the transitional rules?

Adviser's Tax Penalty Planner
A guide to the key direct and indirect tax penalty regimes for returns and payments, excluding VAT.

Calendar of tax deadlines and new tax measures
When do common recurring tax deadlines fall? What other tax significant events are upcoming? What do I need to remember this month?

Tax Data Card 2024-25
A summary of key tax rates and allowances for 2024-25 and 2023-24.

External link

HMRC: Claim to reduce payments on account