January feels like the most important and stressful time of the year with tax returns and self assessment deadlines, until July comes around. The 31st July payment on account catches many people off guard.
For sole traders, landlords and small business owners, self assessments are something that can easily be pushed to the back of the mind.
“There’s still plenty of time.” “I’ll sort this out later.”
The reality is, the second payment arrives quicker than we realise, especially when January doesn’t feel like it was that long ago.
Why The July Self Assessment Deadline Catches People Out
Unlike January, the July self assessment deadline feels as though it arrives without the same level of attention or urgency.
There are fewer reminders online, not as much discussion on social media and, for many business owners, we’re approaching one of the busiest times of year.
With so much going on and trying to run your business efficiently, it’s easy for the admin side of things to slip down the priorities list. Unfortunately, HMRC doesn’t wait for life to slow down just because business picks up.
The issue isn’t necessarily the payment itself, it’s the lack of planning in the lead-up to it.
If you haven’t been setting money aside regularly, the second payment on account for self assessment can suddenly feel like a major hit to cash flow.
Self Assessment And Cash Flow Planning
Throughout our many years of experience, we often find that one of the best ways to manage your self assessment obligations is to treat tax like any other business expense, rather than an unexpected bill that you’re only reminded about when a calendar reminder appears.
Setting aside a percentage from each payment you receive can make deadlines far more manageable and help avoid last-minute stress.
This is especially important for sole traders and tradespeople whose income can fluctuate drastically throughout the year.
Having one strong month doesn’t necessarily mean you’ve got heaps of spare cash, especially when you factor in the cost of materials, fuel, tools and increasing supplier costs.
At Accounts & Returns, we help clients stay ahead of their self assessment payments with practical support, reminders and tax planning advice designed to make things feel simpler and more manageable.
Can Self Assessment Payments On Account Be Reduced?
If your income has significantly dropped compared to the previous tax year, you may be eligible to apply for a reduction to your self assessment payments on account.
This can happen for a number of reasons. Maybe you’re a tradesperson who lost a contract or had to take time off. Perhaps you’re a business owner and work has slowed down. Or a landlord and there have been changes in rental income or rising property costs.
This is why it’s so important to remain careful. Reducing payments on account incorrectly can lead to underpaying tax, which may result in interest charges from HMRC later on.
Rather than guessing, it’s always worth speaking to an experienced accountant who can properly review the numbers before any changes are made.
A bit of planning now can help avoid a much bigger problem later on.
How Accounts & Returns Can Help
Managing your self assessment deadlines is not just about filing a form on time. For most people, the biggest challenge is knowing what’s coming, when it’s coming and making sure enough money has been set aside before the deadlines arrive.
If you need help understanding payments on account, forecasting upcoming tax bills or simply want support keeping things organised with timely reminders, our expert team is always on hand to make things feel clearer and less overwhelming.
With the 31st July self assessment deadline fast approaching, now is the time to get organised before the pressure builds.
If you’re unsure what you owe, need help planning ahead or simply want advice around your tax, get in touch with your local branch today.
