From 16 December 2022 HMRC have scrapped their letters notifying of tax repayments for income tax and corporation tax.
To find out how much tax you are due as a repayment, or how much you owe, you need to log into your personal tax account, or business tax account with HMRC.
If you are going to struggle to pay the tax/NIC due by 31 January 2023 there are two things you can do:
- Consider whether it would be worth reducing your payments on account for 2022/23. This may be appropriate if your profits are not expected to be as high in 2022/23 as 2021/22 or you have invested in capital assets and would be eligible to claim annual investment allowance to reduce your taxable profits below the previous year.
- Apply for a Time to Pay arrangement with HMRC.
For self-assessment tax bills of less than £30,000 the time to pay arrangement can be set up online, as long as you don’t have other outstanding debts to HMRC.
If the payments on account are reduced too much, so you underpay on 31 January and 31 July 2023, you will be charged interest on the amount underpaid for 2022/23 from those dates.
The balancing payment for 2021/22 due by 31 January 2023 cannot be reduced. This will include any CGT due and any student loan repayments.
If you need help in relation to this, please contact us.