Why is the 31 July deadline so important?
This is the date when self-assessment taxpayers must make their second payment on account of income tax for the tax year 2001/02. The date of the first payment was 31 January 2002. The payments on account are each half of the calculated income tax liability for the previous tax year.
If the actual liability for 2001/02 is higher than for 2000/01, any balancing payment is due 31 January 2003. If the liability is lower the taxpayer will be due a rebate.
What if I already know that my tax liability for 2001/02 will be lower than in 2000/01?
If you believe that your income tax liability for 2001/02 is less than 2001/02, you can claim to reduce the second payment on account to the amount (taking account of the first payment) that you calculate will be your income tax liability for 2001/02. However, you must have reasonable grounds for this belief because, if the claim is made fraudulently or negligently, then you are liable to a penalty of up to the amount of tax that was not paid on time. If your claim to make a reduced second payment on account was made reasonably but nevertheless turns out to be too low, then interest on the difference will still run from 31 July 2002.
What happens if I haven’t paid all my tax and submitted my return for 2000/01?
You are heading for trouble! The tax and the return should have been paid and submitted by 31 January 2002. Any outstanding tax as at 31 July becomes liable to the second 5% surcharge, making 10% in all, as well as continuing to clock up interest. The late filing penalty also increases from £100 to £200.
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