Taxes Management Act 1970 section 59A

Payments on account of income tax

Section 59A requires certain taxpayers to make two payments on account of their income tax liability during the tax year, based on the previous year's self-assessment, and sets out the rules for claiming to reduce or eliminate those payments.

• Payments on account apply where the previous year's self-assessment showed a tax liability exceeding tax deducted at source by at least the prescribed amount and prescribed proportion
• Two equal payments on account are required — the first by 31 January in the tax year and the second by 31 July following — each equal to 50% of the previous year's net liability after deducting tax collected at source
• Taxpayers may claim to reduce or eliminate payments on account if they believe their current year liability will be lower, but a penalty may apply if the claim is fraudulently or negligently incorrect
• Payments on account are automatically adjusted if the previous year's assessment is made late, amended, or if a discovery assessment is raised, and an HMRC officer may direct that payments on account do not apply to a specified person