Self Assessment is known as the system HMRC uses to collect Income Tax from some members of the public – such as self-employed workers – with tax normally coming from pensions, wages and savings.
Those who file Self Assessment tax returns are often required to make payments on account.
This payment is due by the end of July and it is the second instalment towards the financial year’s tax bill, with the first payment needing to be paid by January 31.
Due to the Government’s support measures in response to the pandemic, Self Assessment payments due in July 2020 were postponed to January 2021.
As an initiative affiliated with the Chartered Institute of Taxation (CIOT), the reform group has set out to educate the public on policy regarding tax, welfare and tax credits for the last 20 years.
Victoria Todd, the head of the LITRG, outlined how taxpayers can complete their tax payments.
Ms Todd said: “If you have already submitted your 2020/21 tax return, then your second payment on account amount will be recalculated by HMRC based on the information on the tax return and so the amount due on July 31 should be correct.
“Therefore, if you have not yet filed your tax return for 2020/21 you should consider doing so before July 31.”
She added: “If you cannot file the 2020/21 tax return in the next few days but think your tax bill for 2020/21 will be less than that for 2019/20, your payments on account may be higher than they need to be.
“In this case, you may be able to make a claim to reduce the level of the second payment on account for 2020/21. We explain how to do this on our website.
“It is also important to factor any coronavirus support payments that are taxable in 2020/21, such as the first three payments under the Self-Employment Income Support Scheme, into calculations when working out whether you can reduce your 2020/21 payments on account.”
Ultimately, the LITRG is concerned that people will just ignore requests to make their tax payments due to financial reasons.
Ms Todd explained: “If you cannot pay the amount due, contact HMRC as soon as possible to discuss the possibility of paying the amount due in instalments.
“HMRC have indicated they will continue to treat all such requests sympathetically in view of the current economic situation.”