Households across the UK are being reminded to avoid a "costly" 7.75 per cent tax charge which they could be hit with as an important HM Revenue and Customs (HMRC) deadline looms.
Many Britons are liable to make their second "Payments on Account" which needs to be completed by July 31, 2024.
When someone misses this "important" deadline, they will be charged late payment interest.
Currently, this is charged at a rate of 7.75 per cent which is an incentive for people to make sure their bill is paid on time.
Furthermore, penalties will be applied to late payments on account.
Anyone who is concerned about making this deadline can contact HMRC to set up a Time to Pay arrangement.
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GETTYWhat is "Payment on Account"?
This is the term used to describe advance payments made by taxpayers which go towards their eventual tax bill.
These payments are often made by those who are self-employed making Class 4 National Insurance contributions.
Every year, taxpayers have to make two payments on account which are determined using their tax bill from the year before.
The first deadline falls on January 1 while the second deadline is less than a week away on July 31.
After a person files a self-assessment return for the year, and when their payments on account do not pay the full amount of tax, they need to make a "balancing payment" in the following January.
But, if "Payments on Account" are more than someone's tax liability, a refund will be awarded back to the taxpayer.
This deadline is applicable to individuals who are currently self-employed but there are some exceptions.
Exceptions include if someone owes £1,000 or less as this can be made in a single payment on the first return.
Furthermore, the deadline does not apply if they have already paid more than 80 per cent of their tax liability for the year.
Anyone who believes their tax bill will be less than their previous one should reach out to HMRC to reduce the amount they may have to pay.
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Britons could arrange a payment plan by HMRC to spread the cost of their tax bill GETTY Stevie Heafford, a tax partner at HW Fisher, emphasised what could potentially be at stake for thousands of Britons.
She explained: "The payments on account scheme is designed to help people better manage the cost of their tax bill by splitting the amount into two payments and spreading the payments across the year.
"However, missing the deadline can be a costly mistake to make.
"Fortunately, there is still one week to go until the second payment on account is due, giving people plenty of time to work out what they owe and make the necessary payment. Don’t forget to remind your friends and family about this important deadline."
